MSFT — factor decomposition (Technology)

How much of MSFT's move over the window is systematic (market, XLK sector-excess, rate-excess via TLT) vs. idiosyncratic (stock-specific).

Return decomposition (log-return points, additive)

Market+18.53ppSector (excess)-0.00ppRate (excess)-0.00ppIdiosyncratic-24.24pp

Factor betas

Beta · Market (SPY)+0.90
Beta · Sector-excess (XLK)+0.23
Beta · Rate-excess (TLT)-0.34
0.16
Window2025-06-30 → 2026-07-31 (274 trading days)

Read

Moderate confidence: R² is 0.16 — these three factors explain some but not most of MSFT's day-to-day variance. Treat the split below as directional.

Note: the net move here (-5.7pp) is small relative to the systematic and idiosyncratic swings underneath it — they're largely offsetting each other, which is why the idiosyncratic share below exceeds 100% (it's dividing by a small net, not an error). Read the pp values themselves as the meaningful numbers here, not the ratio.

Of MSFT's -5.7pp move over this window, -24.2pp (425% of the total magnitude) is idiosyncratic — not explained by riding market, sector, or rate moves. The rest (+18.5pp) came from systematic exposure: market +18.5pp, sector -0.0pp, rate -0.0pp.