Correlation Between Micron Technology and Money Market
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Money Market 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 Money Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Money Market Obligations, you can compare the effects of market volatilities on Micron Technology and Money Market 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 Money Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Money Market.
Diversification Opportunities for Micron Technology and Money Market
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micron and Money is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Money Market Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Money Market Obligations 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 Money Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Money Market Obligations has no effect on the direction of Micron Technology i.e., Micron Technology and Money Market go up and down completely randomly.
Pair Corralation between Micron Technology and Money Market
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 24.46 times more return on investment than Money Market. However, Micron Technology is 24.46 times more volatile than Money Market Obligations. It trades about 0.09 of its potential returns per unit of risk. Money Market Obligations is currently generating about 0.13 per unit of risk. If you would invest 8,711 in Micron Technology on September 12, 2024 and sell it today you would earn a total of 1,495 from holding Micron Technology or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Money Market Obligations
Performance |
| Timeline |
| Micron Technology |
| Money Market Obligations |
Micron Technology and Money Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Money Market
The main advantage of trading using opposite Micron Technology and Money Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Money Market 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 Money Market will offset losses from the drop in Money Market's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Money Market vs. Franklin Government Money | Money Market vs. Hsbc Treasury Money | Money Market vs. Ubs Money Series | Money Market vs. Cref Money Market |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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