Correlation Between Micron Technology and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Amg Managers 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 Amg Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Amg Managers Brandywine, you can compare the effects of market volatilities on Micron Technology and Amg Managers 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 Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Amg Managers.
Diversification Opportunities for Micron Technology and Amg Managers
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Amg is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Amg Managers Brandywine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Brandywine 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 Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Brandywine has no effect on the direction of Micron Technology i.e., Micron Technology and Amg Managers go up and down completely randomly.
Pair Corralation between Micron Technology and Amg Managers
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 6.43 times more return on investment than Amg Managers. However, Micron Technology is 6.43 times more volatile than Amg Managers Brandywine. It trades about 0.05 of its potential returns per unit of risk. Amg Managers Brandywine is currently generating about 0.09 per unit of risk. If you would invest 8,121 in Micron Technology on September 12, 2024 and sell it today you would earn a total of 2,084 from holding Micron Technology or generate 25.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Amg Managers Brandywine
Performance |
| Timeline |
| Micron Technology |
| Amg Managers Brandywine |
Micron Technology and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Amg Managers
The main advantage of trading using opposite Micron Technology and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Amg Managers 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 Amg Managers will offset losses from the drop in Amg Managers' long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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