Correlation Between Micron Technology and BANK OCHINA
Can any of the company-specific risk be diversified away by investing in both Micron Technology and BANK OCHINA 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 BANK OCHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and BANK OCHINA H, you can compare the effects of market volatilities on Micron Technology and BANK OCHINA 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 BANK OCHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and BANK OCHINA.
Diversification Opportunities for Micron Technology and BANK OCHINA
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Micron and BANK is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and BANK OCHINA H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OCHINA H 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 BANK OCHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OCHINA H has no effect on the direction of Micron Technology i.e., Micron Technology and BANK OCHINA go up and down completely randomly.
Pair Corralation between Micron Technology and BANK OCHINA
Assuming the 90 days trading horizon Micron Technology is expected to generate 1.87 times more return on investment than BANK OCHINA. However, Micron Technology is 1.87 times more volatile than BANK OCHINA H. It trades about 0.07 of its potential returns per unit of risk. BANK OCHINA H is currently generating about 0.01 per unit of risk. If you would invest 9,388 in Micron Technology on September 5, 2024 and sell it today you would earn a total of 362.00 from holding Micron Technology or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. BANK OCHINA H
Performance |
| Timeline |
| Micron Technology |
| BANK OCHINA H |
Micron Technology and BANK OCHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and BANK OCHINA
The main advantage of trading using opposite Micron Technology and BANK OCHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, BANK OCHINA 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 BANK OCHINA will offset losses from the drop in BANK OCHINA's long position.| Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc |
| BANK OCHINA vs. SMA Solar Technology | BANK OCHINA vs. DXC Technology Co | BANK OCHINA vs. Lifeway Foods | BANK OCHINA vs. Micron Technology |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets |