Correlation Between Microsoft and INTERNET INJPADR

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

By analyzing existing cross correlation between Microsoft and INTERNET INJPADR 1, you can compare the effects of market volatilities on Microsoft and INTERNET INJPADR 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 INTERNET INJPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and INTERNET INJPADR.

Diversification Opportunities for Microsoft and INTERNET INJPADR

-0.06

Correlation Coefficient

Microsoft  INTERNET INJPADR

Good diversification

The 3 months correlation between Microsoft and INTERNET is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and INTERNET INJPADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNET INJPADR 1 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 INTERNET INJPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNET INJPADR 1 has no effect on the direction of Microsoft i.e., Microsoft and INTERNET INJPADR go up and down completely randomly.

Pair Corralation between Microsoft and INTERNET INJPADR

Given the investment horizon of 90 days Microsoft is expected to generate 2.36 times less return on investment than INTERNET INJPADR. But when comparing it to its historical volatility, Microsoft is 4.26 times less risky than INTERNET INJPADR. It trades about 0.17 of its potential returns per unit of risk. INTERNET INJPADR 1 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,740  in INTERNET INJPADR 1 on May 26, 2025 and sell it today you would earn a total of  600.00  from holding INTERNET INJPADR 1 or generate 21.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Microsoft  vs.  INTERNET INJPADR 1

Microsoft

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 13 (%) 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.

INTERNET INJPADR 1

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in INTERNET INJPADR 1 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INTERNET INJPADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and INTERNET INJPADR

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

The idea behind Microsoft and INTERNET INJPADR 1 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.