Correlation Between Microsoft and Fielmann Aktiengesellscha

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

By analyzing existing cross correlation between Microsoft and Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on Microsoft and Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Fielmann Aktiengesellscha.

Diversification Opportunities for Microsoft and Fielmann Aktiengesellscha

-0.49

Correlation Coefficient

Microsoft  Fielmann Aktiengesellscha

Very good diversification

The 3 months correlation between Microsoft and Fielmann is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of Microsoft i.e., Microsoft and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between Microsoft and Fielmann Aktiengesellscha

Given the investment horizon of 90 days Microsoft is expected to generate 1.0 times more return on investment than Fielmann Aktiengesellscha. However, Microsoft is 1.0 times less risky than Fielmann Aktiengesellscha. It trades about 0.02 of its potential returns per unit of risk. Fielmann Aktiengesellschaft is currently generating about -0.03 per unit of risk. If you would invest  44,807  in Microsoft on September 19, 2024 and sell it today you would earn a total of  639.00  from holding Microsoft or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.9%
Values	Daily Returns

Microsoft  vs.  Fielmann Aktiengesellschaft

Microsoft

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 4 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Microsoft and Fielmann Aktiengesellscha

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

The idea behind Microsoft and Fielmann Aktiengesellschaft 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.

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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.