Correlation Between Microsoft Corp and Wheaton Precious

Can any of the company-specific risk be diversified away by investing in both Microsoft Corp and Wheaton Precious 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 Wheaton Precious 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 Wheaton Precious Metals, you can compare the effects of market volatilities on Microsoft Corp and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft Corp and Wheaton Precious.

Diversification Opportunities for Microsoft Corp and Wheaton Precious

0.66

Correlation Coefficient

Microsoft Corp  Wheaton Precious

Poor diversification

The 3 months correlation between Microsoft and Wheaton is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp CDR and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Microsoft Corp i.e., Microsoft Corp and Wheaton Precious go up and down completely randomly.

Pair Corralation between Microsoft Corp and Wheaton Precious

Assuming the 90 days trading horizon Microsoft Corp CDR is expected to generate 0.63 times more return on investment than Wheaton Precious. However, Microsoft Corp CDR is 1.58 times less risky than Wheaton Precious. It trades about 0.36 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.09 per unit of risk. If you would invest  2,720  in Microsoft Corp CDR on April 23, 2025 and sell it today you would earn a total of  955.00  from holding Microsoft Corp CDR or generate 35.11% return on investment over 90 days.

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

Microsoft Corp CDR  vs.  Wheaton Precious Metals

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 28 (%) 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.

Wheaton Precious Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wheaton Precious Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Wheaton Precious may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Microsoft Corp and Wheaton Precious

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

The idea behind Microsoft Corp CDR and Wheaton Precious Metals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.