Correlation Between Marvell Technology and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Marvell 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 Marvell 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 Marvell Technology and Micron Technology, you can compare the effects of market volatilities on Marvell 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 Marvell Technology with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Micron Technology.
Diversification Opportunities for Marvell Technology and Micron Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marvell and Micron is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Marvell 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 Marvell 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 Marvell Technology i.e., Marvell Technology and Micron Technology go up and down completely randomly.
Pair Corralation between Marvell Technology and Micron Technology
Assuming the 90 days trading horizon Marvell Technology is expected to generate 1.2 times more return on investment than Micron Technology. However, Marvell Technology is 1.2 times more volatile than Micron Technology. It trades about 0.07 of its potential returns per unit of risk. Micron Technology is currently generating about 0.07 per unit of risk. If you would invest 2,234 in Marvell Technology on August 24, 2024 and sell it today you would earn a total of 3,111 from holding Marvell Technology or generate 139.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Marvell Technology vs. Micron Technology
Performance |
| Timeline |
| Marvell Technology |
| Micron Technology |
Marvell Technology and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Micron Technology
The main advantage of trading using opposite Marvell Technology and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell 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.| Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Fras le SA | Marvell Technology vs. Clave Indices De | Marvell Technology vs. BTG Pactual Logstica |
| Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Broadcom | Micron Technology vs. NXP Semiconductors NV | Micron Technology vs. STMicroelectronics NV |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |