Correlation Between Microsoft and Check Cap

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

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

Diversification Opportunities for Microsoft and Check Cap

0.09

Correlation Coefficient

Microsoft  Check Cap

Significant diversification

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

Pair Corralation between Microsoft and Check Cap

Given the investment horizon of 90 days Microsoft is expected to generate 53.61 times less return on investment than Check Cap. But when comparing it to its historical volatility, Microsoft is 23.36 times less risky than Check Cap. It trades about 0.06 of its potential returns per unit of risk. Check Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  74.00  in Check Cap on July 3, 2025 and sell it today you would earn a total of  138.00  from holding Check Cap or generate 186.49% return on investment over 90 days.

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

Microsoft  vs.  Check Cap

Microsoft

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 4 (%) 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.

Check Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Check Cap are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Check Cap disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Check Cap

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

The idea behind Microsoft and Check Cap 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.