Correlation Between Micron Technology and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Emerging Markets 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 Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Emerging Markets Debt, you can compare the effects of market volatilities on Micron Technology and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Emerging Markets.
Diversification Opportunities for Micron Technology and Emerging Markets
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Emerging is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Emerging Markets Debt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Debt 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Debt has no effect on the direction of Micron Technology i.e., Micron Technology and Emerging Markets go up and down completely randomly.
Pair Corralation between Micron Technology and Emerging Markets
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 10.99 times more return on investment than Emerging Markets. However, Micron Technology is 10.99 times more volatile than Emerging Markets Debt. It trades about 0.09 of its potential returns per unit of risk. Emerging Markets Debt is currently generating about -0.05 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. Emerging Markets Debt
Performance |
| Timeline |
| Micron Technology |
| Emerging Markets Debt |
Micron Technology and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Emerging Markets
The main advantage of trading using opposite Micron Technology and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Emerging Markets vs. Short Duration Inflation | Emerging Markets vs. Ab Bond Inflation | Emerging Markets vs. Federated Hermes Inflation | Emerging Markets vs. Simt Multi Asset Inflation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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