Correlation Between Micron Technology and Canaan
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Canaan 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 Canaan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Canaan Inc, you can compare the effects of market volatilities on Micron Technology and Canaan 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 Canaan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Canaan.
Diversification Opportunities for Micron Technology and Canaan
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Canaan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc 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 Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Micron Technology i.e., Micron Technology and Canaan go up and down completely randomly.
Pair Corralation between Micron Technology and Canaan
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.12 times less return on investment than Canaan. But when comparing it to its historical volatility, Micron Technology is 2.46 times less risky than Canaan. It trades about 0.05 of its potential returns per unit of risk. Canaan Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Canaan Inc on November 9, 2024 and sell it today you would lose (93.00) from holding Canaan Inc or give up 33.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Canaan Inc
Performance |
| Timeline |
| Micron Technology |
| Canaan Inc |
Micron Technology and Canaan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Canaan
The main advantage of trading using opposite Micron Technology and Canaan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Canaan 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 Canaan will offset losses from the drop in Canaan's long position.| Micron Technology vs. Great Western Minerals | Micron Technology vs. Enterprise Bancorp | Micron Technology vs. T Rowe Price | Micron Technology vs. Aviat Networks |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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