Correlation Between Microsoft and FIBRA Storage

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

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

Diversification Opportunities for Microsoft and FIBRA Storage

0.61

Correlation Coefficient

Microsoft  FIBRA Storage

Poor diversification

The 3 months correlation between Microsoft and FIBRA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and FIBRA Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Storage 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 FIBRA Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Storage has no effect on the direction of Microsoft i.e., Microsoft and FIBRA Storage go up and down completely randomly.

Pair Corralation between Microsoft and FIBRA Storage

Assuming the 90 days trading horizon Microsoft is expected to generate 2.18 times more return on investment than FIBRA Storage. However, Microsoft is 2.18 times more volatile than FIBRA Storage. It trades about 0.3 of its potential returns per unit of risk. FIBRA Storage is currently generating about 0.06 per unit of risk. If you would invest  896,253  in Microsoft on April 6, 2025 and sell it today you would earn a total of  43,747  from holding Microsoft or generate 4.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Microsoft  vs.  FIBRA Storage

Microsoft

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Microsoft showed solid returns over the last few months and may actually be approaching a breakup point.

FIBRA Storage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, FIBRA Storage is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Microsoft and FIBRA Storage

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

The idea behind Microsoft and FIBRA Storage 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.