Correlation Between Microsoft and Avant Technologies

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

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

Diversification Opportunities for Microsoft and Avant Technologies

0.09

Correlation Coefficient

Microsoft  Avant Technologies

Significant diversification

The 3 months correlation between Microsoft and Avant is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Avant Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avant Technologies 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 Avant Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avant Technologies has no effect on the direction of Microsoft i.e., Microsoft and Avant Technologies go up and down completely randomly.

Pair Corralation between Microsoft and Avant Technologies

Given the investment horizon of 90 days Microsoft is expected to generate 0.24 times more return on investment than Avant Technologies. However, Microsoft is 4.18 times less risky than Avant Technologies. It trades about 0.2 of its potential returns per unit of risk. Avant Technologies is currently generating about -0.01 per unit of risk. If you would invest  35,333  in Microsoft on July 7, 2025 and sell it today you would earn a total of  16,241  from holding Microsoft or generate 45.97% return on investment over 90 days.

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

Microsoft  vs.  Avant Technologies

Microsoft

Risk-Adjusted Performance

Soft

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.

Avant Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Avant Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in November 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Microsoft and Avant Technologies

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

The idea behind Microsoft and Avant Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.