Correlation Between Micron Technology and Coastal Contacts

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Can any of the company-specific risk be diversified away by investing in both Micron Technology and Coastal Contacts 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 Coastal Contacts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Coastal Contacts, you can compare the effects of market volatilities on Micron Technology and Coastal Contacts 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 Coastal Contacts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Coastal Contacts.

Diversification Opportunities for Micron Technology and Coastal Contacts

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Micron and Coastal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Coastal Contacts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Contacts 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 Coastal Contacts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Contacts has no effect on the direction of Micron Technology i.e., Micron Technology and Coastal Contacts go up and down completely randomly.

Pair Corralation between Micron Technology and Coastal Contacts

If you would invest (100.00) in Coastal Contacts on September 13, 2024 and sell it today you would earn a total of  100.00  from holding Coastal Contacts or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Micron Technology  vs.  Coastal Contacts

 Performance 
       Timeline  
Micron Technology 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Coastal Contacts 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Coastal Contacts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Coastal Contacts is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Micron Technology and Coastal Contacts Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Micron Technology and Coastal Contacts

The main advantage of trading using opposite Micron Technology and Coastal Contacts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Coastal Contacts 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 Coastal Contacts will offset losses from the drop in Coastal Contacts' long position.
The idea behind Micron Technology and Coastal Contacts pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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