Correlation Between Microsoft and AmpliTech
Can any of the company-specific risk be diversified away by investing in both Microsoft and AmpliTech 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 AmpliTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and AmpliTech Group, you can compare the effects of market volatilities on Microsoft and AmpliTech 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 AmpliTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and AmpliTech.
Diversification Opportunities for Microsoft and AmpliTech
Average diversification
The 3 months correlation between Microsoft and AmpliTech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and AmpliTech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmpliTech Group 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 AmpliTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmpliTech Group has no effect on the direction of Microsoft i.e., Microsoft and AmpliTech go up and down completely randomly.
Pair Corralation between Microsoft and AmpliTech
Given the investment horizon of 90 days Microsoft is expected to under-perform the AmpliTech. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 28.92 times less risky than AmpliTech. The stock trades about -0.05 of its potential returns per unit of risk. The AmpliTech Group is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3.20 in AmpliTech Group on November 3, 2024 and sell it today you would earn a total of 71.80 from holding AmpliTech Group or generate 2243.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. AmpliTech Group
Performance |
| Timeline |
| Microsoft |
| AmpliTech Group |
Microsoft and AmpliTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and AmpliTech
The main advantage of trading using opposite Microsoft and AmpliTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, AmpliTech 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 AmpliTech will offset losses from the drop in AmpliTech's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| AmpliTech vs. Auddia Inc | AmpliTech vs. Amplitech Group | AmpliTech vs. Advent Technologies Holdings | AmpliTech vs. Cyclo Therapeutics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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