Correlation Between Align Technology and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Align Technology and Micron 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 Align Technology and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and Micron Technology, you can compare the effects of market volatilities on Align Technology and Micron 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 Align Technology with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and Micron Technology.
Diversification Opportunities for Align Technology and Micron Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Align and Micron is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Align 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 Align Technology are associated (or correlated) with Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Align Technology i.e., Align Technology and Micron Technology go up and down completely randomly.
Pair Corralation between Align Technology and Micron Technology
Assuming the 90 days horizon Align Technology is expected to under-perform the Micron Technology. In addition to that, Align Technology is 1.03 times more volatile than Micron Technology. It trades about -0.01 of its total potential returns per unit of risk. Micron Technology is currently generating about 0.06 per unit of volatility. If you would invest 5,963 in Micron Technology on August 31, 2024 and sell it today you would earn a total of 3,284 from holding Micron Technology or generate 55.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Align Technology vs. Micron Technology
Performance |
| Timeline |
| Align Technology |
| Micron Technology |
Align Technology and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and Micron Technology
The main advantage of trading using opposite Align Technology and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology position performs unexpectedly, Micron 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| Align Technology vs. Stryker | Align Technology vs. Insulet | Align Technology vs. Superior Plus Corp | Align Technology vs. NMI Holdings |
| Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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