Correlation Between Microsoft and Cibc Atlas

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

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

Diversification Opportunities for Microsoft and Cibc Atlas

0.93

Correlation Coefficient

Microsoft  Cibc Atlas

Almost no diversification

The 3 months correlation between Microsoft and Cibc is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Cibc Atlas International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibc Atlas International 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 Cibc Atlas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibc Atlas International has no effect on the direction of Microsoft i.e., Microsoft and Cibc Atlas go up and down completely randomly.

Pair Corralation between Microsoft and Cibc Atlas

Given the investment horizon of 90 days Microsoft is expected to generate 1.83 times more return on investment than Cibc Atlas. However, Microsoft is 1.83 times more volatile than Cibc Atlas International. It trades about 0.41 of its potential returns per unit of risk. Cibc Atlas International is currently generating about 0.2 per unit of risk. If you would invest  37,370  in Microsoft on April 23, 2025 and sell it today you would earn a total of  13,636  from holding Microsoft or generate 36.49% return on investment over 90 days.

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

Microsoft  vs.  Cibc Atlas International

Microsoft

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cibc Atlas International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cibc Atlas International are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cibc Atlas may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Microsoft and Cibc Atlas

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

The idea behind Microsoft and Cibc Atlas International 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.