Correlation Between Micron Technology, and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Micron Technology, and Ascot Resources 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 Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology, and Ascot Resources, you can compare the effects of market volatilities on Micron Technology, and Ascot Resources 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 Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology, and Ascot Resources.
Diversification Opportunities for Micron Technology, and Ascot Resources
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Micron and Ascot is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology, and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources 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 Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Micron Technology, i.e., Micron Technology, and Ascot Resources go up and down completely randomly.
Pair Corralation between Micron Technology, and Ascot Resources
Assuming the 90 days trading horizon Micron Technology, is expected to generate 0.85 times more return on investment than Ascot Resources. However, Micron Technology, is 1.18 times less risky than Ascot Resources. It trades about 0.02 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.02 per unit of risk. If you would invest 2,404 in Micron Technology, on October 26, 2024 and sell it today you would lose (4.00) from holding Micron Technology, or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology, vs. Ascot Resources
Performance |
| Timeline |
| Micron Technology, |
| Ascot Resources |
Micron Technology, and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology, and Ascot Resources
The main advantage of trading using opposite Micron Technology, and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology, position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Micron Technology, vs. NVIDIA CDR | Micron Technology, vs. Broadcom | Micron Technology, vs. Advanced Micro Devices | Micron Technology, vs. QUALCOMM Incorporated |
| Ascot Resources vs. Micron Technology, | Ascot Resources vs. Converge Technology Solutions | Ascot Resources vs. Rocky Mountain Liquor | Ascot Resources vs. Data Communications Management |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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