Correlation Between Microsoft and ALLIANZ SE
Can any of the company-specific risk be diversified away by investing in both Microsoft and ALLIANZ SE 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 ALLIANZ SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on Microsoft and ALLIANZ SE 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 ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ALLIANZ SE.
Diversification Opportunities for Microsoft and ALLIANZ SE
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microsoft and ALLIANZ is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR 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 ALLIANZ SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ SE UNSPADR has no effect on the direction of Microsoft i.e., Microsoft and ALLIANZ SE go up and down completely randomly.
Pair Corralation between Microsoft and ALLIANZ SE
Given the investment horizon of 90 days Microsoft is expected to generate 2.33 times more return on investment than ALLIANZ SE. However, Microsoft is 2.33 times more volatile than ALLIANZ SE UNSPADR. It trades about 0.0 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about -0.04 per unit of risk. If you would invest 42,574 in Microsoft on August 29, 2024 and sell it today you would lose (188.00) from holding Microsoft or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. ALLIANZ SE UNSPADR
Performance |
| Timeline |
| Microsoft |
| ALLIANZ SE UNSPADR |
Microsoft and ALLIANZ SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ALLIANZ SE
The main advantage of trading using opposite Microsoft and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ALLIANZ SE 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 ALLIANZ SE will offset losses from the drop in ALLIANZ SE's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| ALLIANZ SE vs. Equitable Holdings | ALLIANZ SE vs. NN Group NV | ALLIANZ SE vs. Superior Plus Corp | ALLIANZ SE vs. NMI Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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