Correlation Between Micron Technology and Bath Body
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Bath Body 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 Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Bath Body Works, you can compare the effects of market volatilities on Micron Technology and Bath Body 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 Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Bath Body.
Diversification Opportunities for Micron Technology and Bath Body
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Bath is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works 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 Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Micron Technology i.e., Micron Technology and Bath Body go up and down completely randomly.
Pair Corralation between Micron Technology and Bath Body
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.01 times more return on investment than Bath Body. However, Micron Technology is 1.01 times more volatile than Bath Body Works. It trades about 0.06 of its potential returns per unit of risk. Bath Body Works is currently generating about 0.01 per unit of risk. If you would invest 4,988 in Micron Technology on September 24, 2024 and sell it today you would earn a total of 4,024 from holding Micron Technology or generate 80.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.99% |
| Values | Daily Returns |
Micron Technology vs. Bath Body Works
Performance |
| Timeline |
| Micron Technology |
| Bath Body Works |
Micron Technology and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Bath Body
The main advantage of trading using opposite Micron Technology and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Micron Technology vs. Diodes Incorporated | Micron Technology vs. Daqo New Energy | Micron Technology vs. Nano Labs | Micron Technology vs. Impinj Inc |
| Bath Body vs. Uniper SE | Bath Body vs. Mulberry Group PLC | Bath Body vs. London Security Plc | Bath Body vs. Triad Group PLC |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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