Correlation Between Micron Technology and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both Micron Technology and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on Micron Technology and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and ESSILORLUXOTTICA.
Diversification Opportunities for Micron Technology and ESSILORLUXOTTICA
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and ESSILORLUXOTTICA is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON 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 ESSILORLUXOTTICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSILORLUXOTTICA 12ON has no effect on the direction of Micron Technology i.e., Micron Technology and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between Micron Technology and ESSILORLUXOTTICA
Assuming the 90 days trading horizon Micron Technology is expected to generate 3.63 times more return on investment than ESSILORLUXOTTICA. However, Micron Technology is 3.63 times more volatile than ESSILORLUXOTTICA 12ON. It trades about 0.37 of its potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.43 per unit of risk. If you would invest 8,628 in Micron Technology on October 24, 2024 and sell it today you would earn a total of 1,882 from holding Micron Technology or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Micron Technology vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| Micron Technology |
| ESSILORLUXOTTICA 12ON |
Micron Technology and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and ESSILORLUXOTTICA
The main advantage of trading using opposite Micron Technology and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, ESSILORLUXOTTICA 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 ESSILORLUXOTTICA will offset losses from the drop in ESSILORLUXOTTICA's long position.| Micron Technology vs. CITIC Telecom International | Micron Technology vs. Singapore Telecommunications Limited | Micron Technology vs. Highlight Communications AG | Micron Technology vs. CarsalesCom |
| ESSILORLUXOTTICA vs. Treasury Wine Estates | ESSILORLUXOTTICA vs. Micron Technology | ESSILORLUXOTTICA vs. X FAB Silicon Foundries | ESSILORLUXOTTICA vs. FANDIFI TECHNOLOGY P |
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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