Correlation Between Micron Technology and SPASX Midcap
Can any of the company-specific risk be diversified away by investing in both Micron Technology and SPASX Midcap 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 SPASX Midcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and SPASX Midcap 50, you can compare the effects of market volatilities on Micron Technology and SPASX Midcap 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 SPASX Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and SPASX Midcap.
Diversification Opportunities for Micron Technology and SPASX Midcap
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Micron and SPASX is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and SPASX Midcap 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPASX Midcap 50 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 SPASX Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPASX Midcap 50 has no effect on the direction of Micron Technology i.e., Micron Technology and SPASX Midcap go up and down completely randomly.
Pair Corralation between Micron Technology and SPASX Midcap
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the SPASX Midcap. In addition to that, Micron Technology is 3.8 times more volatile than SPASX Midcap 50. It trades about -0.06 of its total potential returns per unit of risk. SPASX Midcap 50 is currently generating about 0.03 per unit of volatility. If you would invest 1,026,910 in SPASX Midcap 50 on September 13, 2024 and sell it today you would earn a total of 8,130 from holding SPASX Midcap 50 or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Micron Technology vs. SPASX Midcap 50
Performance |
| Timeline |
Micron Technology and SPASX Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Micron Technology
Pair trading matchups for Micron Technology
SPASX Midcap 50
Pair trading matchups for SPASX Midcap
Pair Trading with Micron Technology and SPASX Midcap
The main advantage of trading using opposite Micron Technology and SPASX Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, SPASX Midcap 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 SPASX Midcap will offset losses from the drop in SPASX Midcap's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| SPASX Midcap vs. EROAD | SPASX Midcap vs. Vulcan Steel | SPASX Midcap vs. Aeris Environmental | SPASX Midcap vs. Champion Iron |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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