Correlation Between Micron Technology and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both Micron Technology and AM EAGLE 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 AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on Micron Technology and AM EAGLE 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 AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and AM EAGLE.
Diversification Opportunities for Micron Technology and AM EAGLE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Micron and AFG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS 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 AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of Micron Technology i.e., Micron Technology and AM EAGLE go up and down completely randomly.
Pair Corralation between Micron Technology and AM EAGLE
Assuming the 90 days trading horizon Micron Technology is expected to under-perform the AM EAGLE. In addition to that, Micron Technology is 1.17 times more volatile than AM EAGLE OUTFITTERS. It trades about -0.12 of its total potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about 0.01 per unit of volatility. If you would invest 1,610 in AM EAGLE OUTFITTERS on September 22, 2024 and sell it today you would lose (10.00) from holding AM EAGLE OUTFITTERS or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| Micron Technology |
| AM EAGLE OUTFITTERS |
Micron Technology and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and AM EAGLE
The main advantage of trading using opposite Micron Technology and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, AM EAGLE 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| Micron Technology vs. Southwest Airlines Co | Micron Technology vs. PPHE HOTEL GROUP | Micron Technology vs. Xenia Hotels Resorts | Micron Technology vs. MIRAMAR HOTEL INV |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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