Correlation Between Micron Technology and Yara International
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Yara International 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 Yara International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Yara International ASA, you can compare the effects of market volatilities on Micron Technology and Yara International 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 Yara International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Yara International.
Diversification Opportunities for Micron Technology and Yara International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Micron and Yara is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Yara International ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yara International ASA 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 Yara International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yara International ASA has no effect on the direction of Micron Technology i.e., Micron Technology and Yara International go up and down completely randomly.
Pair Corralation between Micron Technology and Yara International
Assuming the 90 days trading horizon Micron Technology is expected to generate 1.73 times more return on investment than Yara International. However, Micron Technology is 1.73 times more volatile than Yara International ASA. It trades about 0.06 of its potential returns per unit of risk. Yara International ASA is currently generating about -0.01 per unit of risk. If you would invest 5,963 in Micron Technology on August 31, 2024 and sell it today you would earn a total of 3,284 from holding Micron Technology or generate 55.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Yara International ASA
Performance |
| Timeline |
| Micron Technology |
| Yara International ASA |
Micron Technology and Yara International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Yara International
The main advantage of trading using opposite Micron Technology and Yara International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Yara International 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 Yara International will offset losses from the drop in Yara International's long position.| Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc |
| Yara International vs. SBA Communications Corp | Yara International vs. Hollywood Bowl Group | Yara International vs. Live Nation Entertainment | Yara International vs. LG Display Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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