Correlation Between Microsoft and ACERINOX
Can any of the company-specific risk be diversified away by investing in both Microsoft and ACERINOX 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 ACERINOX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and ACERINOX, you can compare the effects of market volatilities on Microsoft and ACERINOX 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 ACERINOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and ACERINOX.
Diversification Opportunities for Microsoft and ACERINOX
Poor diversification
The 3 months correlation between Microsoft and ACERINOX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and ACERINOX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACERINOX 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 ACERINOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACERINOX has no effect on the direction of Microsoft i.e., Microsoft and ACERINOX go up and down completely randomly.
Pair Corralation between Microsoft and ACERINOX
Assuming the 90 days trading horizon Microsoft is expected to under-perform the ACERINOX. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.33 times less risky than ACERINOX. The stock trades about 0.0 of its potential returns per unit of risk. The ACERINOX is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,073 in ACERINOX on August 15, 2025 and sell it today you would earn a total of 71.00 from holding ACERINOX or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Microsoft vs. ACERINOX
Performance |
| Timeline |
| Microsoft |
| ACERINOX |
Microsoft and ACERINOX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and ACERINOX
The main advantage of trading using opposite Microsoft and ACERINOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, ACERINOX 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 ACERINOX will offset losses from the drop in ACERINOX's long position.| Microsoft vs. Electronic Arts | Microsoft vs. PDS Biotechnology Corp | Microsoft vs. KIMBALL ELECTRONICS | Microsoft vs. DIAMCOR MINING INC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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