A magnetoresistive sensor includes a sensing element and a stress inducing layer. The sensing element has a layer stack that includes a reference layer having a fixed reference magnetization aligned with a magnetization axis; a magnetic free layer having a magnetically free magnetization, wherein the magnetically free magnetization is variable in a presence of an external magnetic field; and a non-magnetic layer arranged between the reference layer and the magnetic free layer. The stress inducing layer is coupled to the layer stack and is configured to apply a force to the layer stack to induce a mechanical stress in the layer stack along a mechanical stress axis such that the magnetization axis is aligned parallel with the mechanical stress axis or perpendicular with the mechanical stress axis.