Correlation Between Microsoft and Cardiff Lexington

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

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

Diversification Opportunities for Microsoft and Cardiff Lexington

-0.21

Correlation Coefficient

Microsoft  Cardiff Lexington

Very good diversification

The 3 months correlation between Microsoft and Cardiff is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Cardiff Lexington Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Lexington Corp 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 Cardiff Lexington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Lexington Corp has no effect on the direction of Microsoft i.e., Microsoft and Cardiff Lexington go up and down completely randomly.

Pair Corralation between Microsoft and Cardiff Lexington

Given the investment horizon of 90 days Microsoft is expected to generate 48.94 times less return on investment than Cardiff Lexington. But when comparing it to its historical volatility, Microsoft is 33.21 times less risky than Cardiff Lexington. It trades about 0.07 of its potential returns per unit of risk. Cardiff Lexington Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,500  in Cardiff Lexington Corp on April 24, 2025 and sell it today you would lose (1,364) from holding Cardiff Lexington Corp or give up 90.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.44%
Values	Daily Returns

Microsoft  vs.  Cardiff Lexington Corp

Microsoft

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 28 (%) 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.

Cardiff Lexington Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardiff Lexington Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Microsoft and Cardiff Lexington

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

The idea behind Microsoft and Cardiff Lexington Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.