Correlation Between AMPD Ventures and Microsoft

Can any of the company-specific risk be diversified away by investing in both AMPD Ventures and Microsoft 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 AMPD Ventures and Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMPD Ventures and Microsoft, you can compare the effects of market volatilities on AMPD Ventures and Microsoft 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 AMPD Ventures with a short position of Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMPD Ventures and Microsoft.

Diversification Opportunities for AMPD Ventures and Microsoft

0.0

Correlation Coefficient

AMPD Ventures  Microsoft

Pay attention - limited upside

The 3 months correlation between AMPD and Microsoft is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMPD Ventures and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft and AMPD Ventures 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 AMPD Ventures are associated (or correlated) with Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of AMPD Ventures i.e., AMPD Ventures and Microsoft go up and down completely randomly.

Pair Corralation between AMPD Ventures and Microsoft

If you would invest  40,808  in Microsoft on September 4, 2024 and sell it today you would earn a total of  2,312  from holding Microsoft or generate 5.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AMPD Ventures  vs.  Microsoft

AMPD Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMPD Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, AMPD Ventures is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Microsoft

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Microsoft is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AMPD Ventures and Microsoft

The main advantage of trading using opposite AMPD Ventures and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMPD Ventures position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.

The idea behind AMPD Ventures and Microsoft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.