Correlation Between Microsoft and HIVE DIGITAL

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

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

Diversification Opportunities for Microsoft and HIVE DIGITAL

0.65

Correlation Coefficient

Microsoft  HIVE DIGITAL

Poor diversification

The 3 months correlation between Microsoft and HIVE is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and HIVE DIGITAL TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIVE DIGITAL TECH 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 HIVE DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIVE DIGITAL TECH has no effect on the direction of Microsoft i.e., Microsoft and HIVE DIGITAL go up and down completely randomly.

Pair Corralation between Microsoft and HIVE DIGITAL

Assuming the 90 days trading horizon Microsoft is expected to generate 1.52 times less return on investment than HIVE DIGITAL. But when comparing it to its historical volatility, Microsoft is 3.26 times less risky than HIVE DIGITAL. It trades about 0.24 of its potential returns per unit of risk. HIVE DIGITAL TECH is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  146.00  in HIVE DIGITAL TECH on April 24, 2025 and sell it today you would earn a total of  51.00  from holding HIVE DIGITAL TECH or generate 34.93% return on investment over 90 days.

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

Microsoft  vs.  HIVE DIGITAL TECH

Microsoft

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Microsoft displayed solid returns over the last few months and may actually be approaching a breakup point.

HIVE DIGITAL TECH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HIVE DIGITAL TECH are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, HIVE DIGITAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and HIVE DIGITAL

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

The idea behind Microsoft and HIVE DIGITAL TECH 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.