Correlation Between Microsoft and Amplifon SpA
Can any of the company-specific risk be diversified away by investing in both Microsoft and Amplifon SpA 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 Amplifon SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Amplifon SpA, you can compare the effects of market volatilities on Microsoft and Amplifon SpA 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 Amplifon SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Amplifon SpA.
Diversification Opportunities for Microsoft and Amplifon SpA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Amplifon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Amplifon SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplifon SpA 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 Amplifon SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplifon SpA has no effect on the direction of Microsoft i.e., Microsoft and Amplifon SpA go up and down completely randomly.
Pair Corralation between Microsoft and Amplifon SpA
If you would invest 40,554 in Microsoft on September 1, 2024 and sell it today you would earn a total of 1,792 from holding Microsoft or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Microsoft vs. Amplifon SpA
Performance |
| Timeline |
| Microsoft |
| Amplifon SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Microsoft and Amplifon SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Amplifon SpA
The main advantage of trading using opposite Microsoft and Amplifon SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Amplifon SpA 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 Amplifon SpA will offset losses from the drop in Amplifon SpA's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Amplifon SpA vs. MYR Group | Amplifon SpA vs. RBC Bearings Incorporated | Amplifon SpA vs. Allient | Amplifon SpA vs. KVH Industries |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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