Correlation Between Micron Technology and Sancus Lending
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Sancus Lending 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 Micron Technology and Sancus Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Sancus Lending Group, you can compare the effects of market volatilities on Micron Technology and Sancus Lending 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 Micron Technology with a short position of Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Sancus Lending.
Diversification Opportunities for Micron Technology and Sancus Lending
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Micron and Sancus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group and Micron Technology 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 Micron Technology are associated (or correlated) with Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of Micron Technology i.e., Micron Technology and Sancus Lending go up and down completely randomly.
Pair Corralation between Micron Technology and Sancus Lending
Assuming the 90 days trading horizon Micron Technology is expected to generate 2.9 times less return on investment than Sancus Lending. But when comparing it to its historical volatility, Micron Technology is 3.03 times less risky than Sancus Lending. It trades about 0.03 of its potential returns per unit of risk. Sancus Lending Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 83.00 in Sancus Lending Group on November 4, 2024 and sell it today you would lose (23.00) from holding Sancus Lending Group or give up 27.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Micron Technology vs. Sancus Lending Group
Performance |
| Timeline |
| Micron Technology |
| Sancus Lending Group |
Micron Technology and Sancus Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Sancus Lending
The main advantage of trading using opposite Micron Technology and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending's long position.| Micron Technology vs. Samsung Electronics Co | Micron Technology vs. Samsung Electronics Co | Micron Technology vs. Toyota Motor Corp | Micron Technology vs. Reliance Industries Ltd |
| Sancus Lending vs. Bankers Investment Trust | Sancus Lending vs. Costco Wholesale Corp | Sancus Lending vs. Qurate Retail Series | Sancus Lending vs. Mobius Investment Trust |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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