Correlation Between Microsoft and VCI Global

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

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

Diversification Opportunities for Microsoft and VCI Global

-0.81

Correlation Coefficient

Microsoft  VCI Global

Pay attention - limited upside

The 3 months correlation between Microsoft and VCI is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and VCI Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCI Global Limited 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 VCI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCI Global Limited has no effect on the direction of Microsoft i.e., Microsoft and VCI Global go up and down completely randomly.

Pair Corralation between Microsoft and VCI Global

Given the investment horizon of 90 days Microsoft is expected to generate 0.12 times more return on investment than VCI Global. However, Microsoft is 8.46 times less risky than VCI Global. It trades about 0.36 of its potential returns per unit of risk. VCI Global Limited is currently generating about -0.19 per unit of risk. If you would invest  39,332  in Microsoft on April 29, 2025 and sell it today you would earn a total of  11,918  from holding Microsoft or generate 30.3% return on investment over 90 days.

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

Microsoft  vs.  VCI Global Limited

Microsoft

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 27 (%) 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.

VCI Global Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Microsoft and VCI Global

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

The idea behind Microsoft and VCI Global Limited 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.