Correlation Between Microsoft and Robo Global

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

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

Diversification Opportunities for Microsoft and Robo Global

0.96

Correlation Coefficient

Microsoft  Robo Global

Almost no diversification

The 3 months correlation between Microsoft and Robo is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Robo Global Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robo Global Robotics 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 Robo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robo Global Robotics has no effect on the direction of Microsoft i.e., Microsoft and Robo Global go up and down completely randomly.

Pair Corralation between Microsoft and Robo Global

Given the investment horizon of 90 days Microsoft is expected to generate 0.76 times more return on investment than Robo Global. However, Microsoft is 1.32 times less risky than Robo Global. It trades about 0.38 of its potential returns per unit of risk. Robo Global Robotics is currently generating about 0.24 per unit of risk. If you would invest  43,448  in Microsoft on May 2, 2025 and sell it today you would earn a total of  9,902  from holding Microsoft or generate 22.79% 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.  Robo Global Robotics

Microsoft

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 29 (%) 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.

Robo Global Robotics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Robo Global Robotics are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Robo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Robo Global

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

The idea behind Microsoft and Robo Global Robotics 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.