Correlation Between Micron Technology and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Globex Mining 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 Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Globex Mining Enterprises, you can compare the effects of market volatilities on Micron Technology and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Globex Mining.
Diversification Opportunities for Micron Technology and Globex Mining
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Globex is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Micron Technology i.e., Micron Technology and Globex Mining go up and down completely randomly.
Pair Corralation between Micron Technology and Globex Mining
Assuming the 90 days trading horizon Micron Technology is expected to generate 1.74 times more return on investment than Globex Mining. However, Micron Technology is 1.74 times more volatile than Globex Mining Enterprises. It trades about 0.37 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.47 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 | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Globex Mining Enterprises
Performance |
| Timeline |
| Micron Technology |
| Globex Mining Enterprises |
Micron Technology and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Globex Mining
The main advantage of trading using opposite Micron Technology and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining'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 |
| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining 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 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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