Correlation Between Goldman Sachs and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and Micron Technology, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Micron Technology.
Diversification Opportunities for Goldman Sachs and Micron Technology
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and Micron is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Goldman Sachs 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 The Goldman Sachs 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 Goldman Sachs i.e., Goldman Sachs and Micron Technology go up and down completely randomly.
Pair Corralation between Goldman Sachs and Micron Technology
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 0.6 times more return on investment than Micron Technology. However, The Goldman Sachs is 1.67 times less risky than Micron Technology. It trades about 0.17 of its potential returns per unit of risk. Micron Technology is currently generating about -0.02 per unit of risk. If you would invest 8,034 in The Goldman Sachs on September 5, 2024 and sell it today you would earn a total of 4,158 from holding The Goldman Sachs or generate 51.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. Micron Technology
Performance |
| Timeline |
| Goldman Sachs |
| Micron Technology |
Goldman Sachs and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Micron Technology
The main advantage of trading using opposite Goldman Sachs and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Delta Air Lines | Goldman Sachs vs. Telecomunicaes Brasileiras SA | Goldman Sachs vs. Prudential Financial | Goldman Sachs vs. Zoom Video Communications |
| Micron Technology vs. Metalrgica Riosulense SA | Micron Technology vs. Prudential Financial | Micron Technology vs. Metalurgica Gerdau SA | Micron Technology vs. Zoom Video Communications |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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