Correlation Between Micron Technology and King Chou
Can any of the company-specific risk be diversified away by investing in both Micron Technology and King Chou 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 King Chou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and King Chou Marine, you can compare the effects of market volatilities on Micron Technology and King Chou 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 King Chou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and King Chou.
Diversification Opportunities for Micron Technology and King Chou
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Micron and King is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and King Chou Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Chou Marine 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 King Chou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Chou Marine has no effect on the direction of Micron Technology i.e., Micron Technology and King Chou go up and down completely randomly.
Pair Corralation between Micron Technology and King Chou
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 3.32 times more return on investment than King Chou. However, Micron Technology is 3.32 times more volatile than King Chou Marine. It trades about 0.09 of its potential returns per unit of risk. King Chou Marine is currently generating about 0.09 per unit of risk. If you would invest 8,711 in Micron Technology on September 12, 2024 and sell it today you would earn a total of 1,495 from holding Micron Technology or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Micron Technology vs. King Chou Marine
Performance |
| Timeline |
| Micron Technology |
| King Chou Marine |
Micron Technology and King Chou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and King Chou
The main advantage of trading using opposite Micron Technology and King Chou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, King Chou 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 King Chou will offset losses from the drop in King Chou's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| King Chou vs. Strong H Machinery | King Chou vs. GeneFerm Biotechnology Co | King Chou vs. Shieh Yih Machinery | King Chou vs. SynCore Biotechnology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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