Correlation Between Micron Technology and Xeros Technology
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Xeros Technology 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 Xeros Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Xeros Technology Group, you can compare the effects of market volatilities on Micron Technology and Xeros Technology 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 Xeros Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Xeros Technology.
Diversification Opportunities for Micron Technology and Xeros Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micron and Xeros is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Xeros Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xeros Technology 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 Xeros Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xeros Technology has no effect on the direction of Micron Technology i.e., Micron Technology and Xeros Technology go up and down completely randomly.
Pair Corralation between Micron Technology and Xeros Technology
Assuming the 90 days trading horizon Micron Technology is expected to generate 2.53 times less return on investment than Xeros Technology. But when comparing it to its historical volatility, Micron Technology is 1.03 times less risky than Xeros Technology. It trades about 0.05 of its potential returns per unit of risk. Xeros Technology Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Xeros Technology Group on October 20, 2024 and sell it today you would earn a total of 10.00 from holding Xeros Technology Group or generate 23.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Xeros Technology Group
Performance |
| Timeline |
| Micron Technology |
| Xeros Technology |
Micron Technology and Xeros Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Xeros Technology
The main advantage of trading using opposite Micron Technology and Xeros Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Xeros Technology 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 Xeros Technology will offset losses from the drop in Xeros Technology's long position.| Micron Technology vs. Lindsell Train Investment | Micron Technology vs. Beeks Trading | Micron Technology vs. Mobius Investment Trust | Micron Technology vs. Jupiter Green Investment |
| Xeros Technology vs. Micron Technology | Xeros Technology vs. PureTech Health plc | Xeros Technology vs. JLEN Environmental Assets | Xeros Technology vs. Made Tech Group |
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.
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