Correlation Between Microsoft and STAG Industrial,

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

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

Diversification Opportunities for Microsoft and STAG Industrial,

0.75

Correlation Coefficient

Microsoft  STAG Industrial,

Poor diversification

The 3 months correlation between Microsoft and STAG is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and STAG Industrial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial, 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 STAG Industrial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial, has no effect on the direction of Microsoft i.e., Microsoft and STAG Industrial, go up and down completely randomly.

Pair Corralation between Microsoft and STAG Industrial,

Assuming the 90 days trading horizon Microsoft is expected to generate 0.79 times more return on investment than STAG Industrial,. However, Microsoft is 1.27 times less risky than STAG Industrial,. It trades about 0.3 of its potential returns per unit of risk. STAG Industrial, is currently generating about 0.08 per unit of risk. If you would invest  9,226  in Microsoft on April 25, 2025 and sell it today you would earn a total of  2,374  from holding Microsoft or generate 25.73% return on investment over 90 days.

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

Microsoft  vs.  STAG Industrial,

Microsoft

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Microsoft sustained solid returns over the last few months and may actually be approaching a breakup point.

STAG Industrial,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in STAG Industrial, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, STAG Industrial, may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Microsoft and STAG Industrial,

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

The idea behind Microsoft and STAG Industrial, 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.