Correlation Between Micron Technology and Seres Therapeutics
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Seres Therapeutics 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 Seres Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Seres Therapeutics, you can compare the effects of market volatilities on Micron Technology and Seres Therapeutics 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 Seres Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Seres Therapeutics.
Diversification Opportunities for Micron Technology and Seres Therapeutics
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Micron and Seres is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics 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 Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Micron Technology i.e., Micron Technology and Seres Therapeutics go up and down completely randomly.
Pair Corralation between Micron Technology and Seres Therapeutics
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 0.66 times more return on investment than Seres Therapeutics. However, Micron Technology is 1.52 times less risky than Seres Therapeutics. It trades about 0.26 of its potential returns per unit of risk. Seres Therapeutics is currently generating about -0.18 per unit of risk. If you would invest 9,000 in Micron Technology on October 21, 2024 and sell it today you would earn a total of 1,575 from holding Micron Technology or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Micron Technology vs. Seres Therapeutics
Performance |
| Timeline |
| Micron Technology |
| Seres Therapeutics |
Micron Technology and Seres Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Seres Therapeutics
The main advantage of trading using opposite Micron Technology and Seres Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Seres Therapeutics 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 Seres Therapeutics will offset losses from the drop in Seres Therapeutics' long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Seres Therapeutics vs. TYSON FOODS A | Seres Therapeutics vs. Zijin Mining Group | Seres Therapeutics vs. De Grey Mining | Seres Therapeutics vs. Jacquet Metal Service |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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