Correlation Between Microsoft and QuickLogic

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

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

Diversification Opportunities for Microsoft and QuickLogic

0.76

Correlation Coefficient

Microsoft  QuickLogic

Poor diversification

The 3 months correlation between Microsoft and QuickLogic is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and QuickLogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuickLogic 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 QuickLogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuickLogic has no effect on the direction of Microsoft i.e., Microsoft and QuickLogic go up and down completely randomly.

Pair Corralation between Microsoft and QuickLogic

Given the investment horizon of 90 days Microsoft is expected to generate 1.18 times less return on investment than QuickLogic. But when comparing it to its historical volatility, Microsoft is 3.62 times less risky than QuickLogic. It trades about 0.36 of its potential returns per unit of risk. QuickLogic is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  493.00  in QuickLogic on April 24, 2025 and sell it today you would earn a total of  148.00  from holding QuickLogic or generate 30.02% return on investment over 90 days.

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

Microsoft  vs.  QuickLogic

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.

QuickLogic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuickLogic are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward indicators, QuickLogic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and QuickLogic

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

The idea behind Microsoft and QuickLogic 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.