Correlation Between DAX Index and Micron Technology
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By analyzing existing cross correlation between DAX Index and Micron Technology, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Micron Technology.
Diversification Opportunities for DAX Index and Micron Technology
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DAX and Micron is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Micron Technology go up and down completely randomly.
Pair Corralation between DAX Index and Micron Technology
Assuming the 90 days trading horizon DAX Index is expected to generate 0.31 times more return on investment than Micron Technology. However, DAX Index is 3.21 times less risky than Micron Technology. It trades about -0.05 of its potential returns per unit of risk. Micron Technology is currently generating about -0.02 per unit of risk. If you would invest 1,953,162 in DAX Index on August 29, 2024 and sell it today you would lose (23,564) from holding DAX Index or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Micron Technology
Performance |
| Timeline |
DAX Index and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Micron Technology
Pair trading matchups for Micron Technology
Pair Trading with DAX Index and Micron Technology
The main advantage of trading using opposite DAX Index and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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