Correlation Between Microsoft Corp and Killam Apartment

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

By analyzing existing cross correlation between Microsoft Corp CDR and Killam Apartment Real, you can compare the effects of market volatilities on Microsoft Corp and Killam Apartment 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 Corp with a short position of Killam Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft Corp and Killam Apartment.

Diversification Opportunities for Microsoft Corp and Killam Apartment

0.88

Correlation Coefficient

Microsoft Corp  Killam Apartment

Very poor diversification

The 3 months correlation between Microsoft and Killam is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp CDR and Killam Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killam Apartment Real and Microsoft Corp 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 Corp CDR are associated (or correlated) with Killam Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killam Apartment Real has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and Killam Apartment go up and down completely randomly.

Pair Corralation between Microsoft Corp and Killam Apartment

Assuming the 90 days trading horizon Microsoft Corp CDR is expected to generate 1.01 times more return on investment than Killam Apartment. However, Microsoft Corp is 1.01 times more volatile than Killam Apartment Real. It trades about 0.38 of its potential returns per unit of risk. Killam Apartment Real is currently generating about 0.16 per unit of risk. If you would invest  2,658  in Microsoft Corp CDR on April 22, 2025 and sell it today you would earn a total of  1,017  from holding Microsoft Corp CDR or generate 38.26% return on investment over 90 days.

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

Microsoft Corp CDR  vs.  Killam Apartment Real

Microsoft Corp CDR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corp CDR are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Microsoft Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Killam Apartment Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Killam Apartment Real are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Killam Apartment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft Corp and Killam Apartment

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

The idea behind Microsoft Corp CDR and Killam Apartment Real 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.