Correlation Between MicroAlgo and Advanced Micro

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

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

Diversification Opportunities for MicroAlgo and Advanced Micro

-0.34

Correlation Coefficient

MicroAlgo  Advanced Micro

Very good diversification

The 3 months correlation between MicroAlgo and Advanced is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and MicroAlgo 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 MicroAlgo are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of MicroAlgo i.e., MicroAlgo and Advanced Micro go up and down completely randomly.

Pair Corralation between MicroAlgo and Advanced Micro

Given the investment horizon of 90 days MicroAlgo is expected to under-perform the Advanced Micro. In addition to that, MicroAlgo is 1.57 times more volatile than Advanced Micro Devices. It trades about -0.26 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.11 per unit of volatility. If you would invest  15,740  in Advanced Micro Devices on February 26, 2024 and sell it today you would earn a total of  896.00  from holding Advanced Micro Devices or generate 5.69% return on investment over 90 days.

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

MicroAlgo  vs.  Advanced Micro Devices

MicroAlgo

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MicroAlgo are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, MicroAlgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Advanced Micro Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Micro Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Advanced Micro is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MicroAlgo and Advanced Micro

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

The idea behind MicroAlgo and Advanced Micro Devices 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.