Correlation Between Micron Technology and Cabot Oil
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Cabot Oil 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 Cabot Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Cabot Oil Gas, you can compare the effects of market volatilities on Micron Technology and Cabot Oil 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 Cabot Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Cabot Oil.
Diversification Opportunities for Micron Technology and Cabot Oil
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Micron and Cabot is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Cabot Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot Oil Gas 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 Cabot Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot Oil Gas has no effect on the direction of Micron Technology i.e., Micron Technology and Cabot Oil go up and down completely randomly.
Pair Corralation between Micron Technology and Cabot Oil
Assuming the 90 days horizon Micron Technology is expected to under-perform the Cabot Oil. In addition to that, Micron Technology is 1.27 times more volatile than Cabot Oil Gas. It trades about -0.1 of its total potential returns per unit of risk. Cabot Oil Gas is currently generating about 0.22 per unit of volatility. If you would invest 49,379 in Cabot Oil Gas on September 12, 2024 and sell it today you would earn a total of 4,921 from holding Cabot Oil Gas or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Micron Technology vs. Cabot Oil Gas
Performance |
| Timeline |
| Micron Technology |
| Cabot Oil Gas |
Micron Technology and Cabot Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Cabot Oil
The main advantage of trading using opposite Micron Technology and Cabot Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Cabot Oil 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 Cabot Oil will offset losses from the drop in Cabot Oil's long position.| Micron Technology vs. GMxico Transportes SAB | Micron Technology vs. Verizon Communications | Micron Technology vs. Grupo Hotelero Santa | Micron Technology vs. KB Home |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |