Correlation Between Microsoft and AIM Treasurers

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Can any of the company-specific risk be diversified away by investing in both Microsoft and AIM Treasurers 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 AIM Treasurers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and AIM Treasurers Series, you can compare the effects of market volatilities on Microsoft and AIM Treasurers 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 AIM Treasurers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and AIM Treasurers.

Diversification Opportunities for Microsoft and AIM Treasurers

  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Microsoft and AIM Treasurers

If you would invest  0.00  in AIM Treasurers Series on December 29, 2022 and sell it today you would earn a total of  0.00  from holding AIM Treasurers Series or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
ValuesDaily Returns

Microsoft  vs.  AIM Treasurers Series

 Performance (%) 

Microsoft Performance

0 of 100

Over the last 90 days Microsoft has generated negative risk-adjusted returns adding no value to investors with long positions. 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.
AIM Treasurers Series 

IPVXX Performance

0 of 100

Over the last 90 days AIM Treasurers Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, AIM Treasurers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Microsoft and AIM Treasurers Volatility Contrast

   Predicted Return Density   

Pair Trading with Microsoft and AIM Treasurers

The main advantage of trading using opposite Microsoft and AIM Treasurers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, AIM Treasurers 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 AIM Treasurers will offset losses from the drop in AIM Treasurers' long position.
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The idea behind Microsoft and AIM Treasurers Series 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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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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