Correlation Between Microsoft and Astronics

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

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

Diversification Opportunities for Microsoft and Astronics

0.24

Correlation Coefficient

Microsoft  Astronics

Modest diversification

The 3 months correlation between Microsoft and Astronics is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Astronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics 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 Astronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics has no effect on the direction of Microsoft i.e., Microsoft and Astronics go up and down completely randomly.

Pair Corralation between Microsoft and Astronics

Given the investment horizon of 90 days Microsoft is expected to generate 1.89 times less return on investment than Astronics. But when comparing it to its historical volatility, Microsoft is 3.82 times less risky than Astronics. It trades about 0.16 of its potential returns per unit of risk. Astronics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,172  in Astronics on May 27, 2025 and sell it today you would earn a total of  471.00  from holding Astronics or generate 14.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Microsoft  vs.  Astronics

Microsoft

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Astronics

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Astronics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Astronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Astronics

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

The idea behind Microsoft and Astronics 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.