Correlation Between Micron Technology and Emerging Markets

Specify exactly 2 symbols:
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 Sustainability, 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

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Micron and Emerging is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Emerging Markets Sustainabilit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Sus 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 Sus 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 under-perform the Emerging Markets. In addition to that, Micron Technology is 3.58 times more volatile than Emerging Markets Sustainability. It trades about -0.12 of its total potential returns per unit of risk. Emerging Markets Sustainability is currently generating about -0.04 per unit of volatility. If you would invest  986.00  in Emerging Markets Sustainability on September 12, 2024 and sell it today you would lose (6.00) from holding Emerging Markets Sustainability or give up 0.61% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Micron Technology  vs.  Emerging Markets Sustainabilit

 Performance 
       Timeline  
Micron Technology 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.
Emerging Markets Sus 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Markets Sustainability are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Emerging Markets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind Micron Technology and Emerging Markets Sustainability 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

Other Complementary Tools

Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like