Correlation Between Microsoft and Vericel Corp

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

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

Diversification Opportunities for Microsoft and Vericel Corp

-0.07

Correlation Coefficient

Microsoft  Vericel Corp

Good diversification

The 3 months correlation between Microsoft and Vericel is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Vericel Corp Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericel Corp Ord 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 Vericel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericel Corp Ord has no effect on the direction of Microsoft i.e., Microsoft and Vericel Corp go up and down completely randomly.

Pair Corralation between Microsoft and Vericel Corp

Given the investment horizon of 90 days Microsoft is expected to generate 0.32 times more return on investment than Vericel Corp. However, Microsoft is 3.14 times less risky than Vericel Corp. It trades about 0.38 of its potential returns per unit of risk. Vericel Corp Ord is currently generating about 0.04 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Microsoft  vs.  Vericel Corp Ord

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.

Vericel Corp Ord

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Vericel Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Microsoft and Vericel Corp

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

The idea behind Microsoft and Vericel Corp Ord 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.