Correlation Between Microsoft and Bloise Holding

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

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

Diversification Opportunities for Microsoft and Bloise Holding

0.02

Correlation Coefficient

Microsoft  Bloise Holding

Significant diversification

The 3 months correlation between Microsoft and Bloise is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Bloise Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloise Holding AG 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 Bloise Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloise Holding AG has no effect on the direction of Microsoft i.e., Microsoft and Bloise Holding go up and down completely randomly.

Pair Corralation between Microsoft and Bloise Holding

Given the investment horizon of 90 days Microsoft is expected to generate 3.82 times less return on investment than Bloise Holding. But when comparing it to its historical volatility, Microsoft is 16.14 times less risky than Bloise Holding. It trades about 0.26 of its potential returns per unit of risk. Bloise Holding AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  22,798  in Bloise Holding AG on April 24, 2025 and sell it today you would earn a total of  602.00  from holding Bloise Holding AG or generate 2.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Microsoft  vs.  Bloise Holding AG

Microsoft

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bloise Holding AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bloise Holding AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Bloise Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Bloise Holding

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

The idea behind Microsoft and Bloise Holding AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.