Correlation Between Microsoft and AMAG AUSTRIA
Can any of the company-specific risk be diversified away by investing in both Microsoft and AMAG AUSTRIA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microsoft and AMAG AUSTRIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and AMAG AUSTRIA M, you can compare the effects of market volatilities on Microsoft and AMAG AUSTRIA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Microsoft with a short position of AMAG AUSTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and AMAG AUSTRIA.
Diversification Opportunities for Microsoft and AMAG AUSTRIA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microsoft and AMAG is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and AMAG AUSTRIA M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG AUSTRIA M and Microsoft is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Microsoft are associated (or correlated) with AMAG AUSTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG AUSTRIA M has no effect on the direction of Microsoft i.e., Microsoft and AMAG AUSTRIA go up and down completely randomly.
Pair Corralation between Microsoft and AMAG AUSTRIA
Assuming the 90 days trading horizon Microsoft is expected to generate 1.29 times more return on investment than AMAG AUSTRIA. However, Microsoft is 1.29 times more volatile than AMAG AUSTRIA M. It trades about 0.08 of its potential returns per unit of risk. AMAG AUSTRIA M is currently generating about -0.06 per unit of risk. If you would invest 37,532 in Microsoft on August 31, 2024 and sell it today you would earn a total of 2,558 from holding Microsoft or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Microsoft vs. AMAG AUSTRIA M
Performance |
| Timeline |
| Microsoft |
| AMAG AUSTRIA M |
Microsoft and AMAG AUSTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and AMAG AUSTRIA
The main advantage of trading using opposite Microsoft and AMAG AUSTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, AMAG AUSTRIA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AMAG AUSTRIA will offset losses from the drop in AMAG AUSTRIA's long position.| Microsoft vs. Geely Automobile Holdings | Microsoft vs. CarsalesCom | Microsoft vs. INTER CARS SA | Microsoft vs. Motorcar Parts of |
| AMAG AUSTRIA vs. SANOK RUBBER ZY | AMAG AUSTRIA vs. Sumitomo Rubber Industries | AMAG AUSTRIA vs. SCIENCE IN SPORT | AMAG AUSTRIA vs. UNIVERSAL MUSIC GROUP |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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