Correlation Between Microsoft and Amundi Climate
Can any of the company-specific risk be diversified away by investing in both Microsoft and Amundi Climate 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 Amundi Climate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Amundi Climate Transition, you can compare the effects of market volatilities on Microsoft and Amundi Climate 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 Amundi Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Amundi Climate.
Diversification Opportunities for Microsoft and Amundi Climate
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Amundi is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Amundi Climate Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Climate Transition 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 Amundi Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Climate Transition has no effect on the direction of Microsoft i.e., Microsoft and Amundi Climate go up and down completely randomly.
Pair Corralation between Microsoft and Amundi Climate
Given the investment horizon of 90 days Microsoft is expected to under-perform the Amundi Climate. In addition to that, Microsoft is 5.32 times more volatile than Amundi Climate Transition. It trades about -0.06 of its total potential returns per unit of risk. Amundi Climate Transition is currently generating about -0.09 per unit of volatility. If you would invest 977.00 in Amundi Climate Transition on August 26, 2024 and sell it today you would lose (6.00) from holding Amundi Climate Transition or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Amundi Climate Transition
Performance |
| Timeline |
| Microsoft |
| Amundi Climate Transition |
Microsoft and Amundi Climate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Amundi Climate
The main advantage of trading using opposite Microsoft and Amundi Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Amundi Climate 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 Amundi Climate will offset losses from the drop in Amundi Climate's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Amundi Climate vs. Pioneer Fundamental Growth | Amundi Climate vs. Pioneer Global Equity | Amundi Climate vs. Pioneer Disciplined Value | Amundi Climate vs. Pioneer Disciplined Value |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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