Correlation Between Microsoft and Allianzgi Emerging
Can any of the company-specific risk be diversified away by investing in both Microsoft and Allianzgi Emerging 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 Allianzgi Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Allianzgi Emerging Markets, you can compare the effects of market volatilities on Microsoft and Allianzgi Emerging 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 Allianzgi Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Allianzgi Emerging.
Diversification Opportunities for Microsoft and Allianzgi Emerging
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and Allianzgi is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Allianzgi Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Emerging 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 Allianzgi Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Emerging has no effect on the direction of Microsoft i.e., Microsoft and Allianzgi Emerging go up and down completely randomly.
Pair Corralation between Microsoft and Allianzgi Emerging
Given the investment horizon of 90 days Microsoft is expected to generate 1.62 times more return on investment than Allianzgi Emerging. However, Microsoft is 1.62 times more volatile than Allianzgi Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Allianzgi Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest 30,123 in Microsoft on August 26, 2024 and sell it today you would earn a total of 11,577 from holding Microsoft or generate 38.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Allianzgi Emerging Markets
Performance |
| Timeline |
| Microsoft |
| Allianzgi Emerging |
Microsoft and Allianzgi Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Allianzgi Emerging
The main advantage of trading using opposite Microsoft and Allianzgi Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Allianzgi Emerging 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 Allianzgi Emerging will offset losses from the drop in Allianzgi Emerging's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Allianzgi Emerging vs. Ultraemerging Markets Profund | Allianzgi Emerging vs. Allianzgi Nfj International | Allianzgi Emerging vs. Alger Global Growth | Allianzgi Emerging vs. Allianzgi Emerging Markets |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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