Correlation Between Microsoft and Immatics Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Microsoft and Immatics Biotechnologies 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 Immatics Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and immatics biotechnologies GmbH, you can compare the effects of market volatilities on Microsoft and Immatics Biotechnologies 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 Immatics Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Immatics Biotechnologies.
Diversification Opportunities for Microsoft and Immatics Biotechnologies
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Immatics is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and immatics biotechnologies GmbH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immatics Biotechnologies 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 Immatics Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immatics Biotechnologies has no effect on the direction of Microsoft i.e., Microsoft and Immatics Biotechnologies go up and down completely randomly.
Pair Corralation between Microsoft and Immatics Biotechnologies
Given the investment horizon of 90 days Microsoft is expected to generate 0.17 times more return on investment than Immatics Biotechnologies. However, Microsoft is 5.76 times less risky than Immatics Biotechnologies. It trades about -0.04 of its potential returns per unit of risk. immatics biotechnologies GmbH is currently generating about -0.53 per unit of risk. If you would invest 42,388 in Microsoft on August 25, 2024 and sell it today you would lose (688.00) from holding Microsoft or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Microsoft vs. immatics biotechnologies GmbH
Performance |
| Timeline |
| Microsoft |
| Immatics Biotechnologies |
Microsoft and Immatics Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Immatics Biotechnologies
The main advantage of trading using opposite Microsoft and Immatics Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Immatics Biotechnologies 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 Immatics Biotechnologies will offset losses from the drop in Immatics Biotechnologies' long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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