Correlation Between Micron Technology and Hampton Financial
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Hampton Financial 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 Hampton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Hampton Financial Corp, you can compare the effects of market volatilities on Micron Technology and Hampton Financial 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 Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Hampton Financial.
Diversification Opportunities for Micron Technology and Hampton Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Micron and Hampton is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial Corp 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 Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of Micron Technology i.e., Micron Technology and Hampton Financial go up and down completely randomly.
Pair Corralation between Micron Technology and Hampton Financial
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.13 times more return on investment than Hampton Financial. However, Micron Technology is 1.13 times more volatile than Hampton Financial Corp. It trades about 0.05 of its potential returns per unit of risk. Hampton Financial Corp is currently generating about 0.01 per unit of risk. If you would invest 5,353 in Micron Technology on December 4, 2024 and sell it today you would earn a total of 3,473 from holding Micron Technology or generate 64.88% 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. Hampton Financial Corp
Performance |
| Timeline |
| Micron Technology |
| Hampton Financial Corp |
Micron Technology and Hampton Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Hampton Financial
The main advantage of trading using opposite Micron Technology and Hampton Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Hampton Financial 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 Hampton Financial will offset losses from the drop in Hampton Financial's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Hampton Financial vs. Adex Mining | Hampton Financial vs. Profound Medical Corp | Hampton Financial vs. XXIX Metal Corp | Hampton Financial vs. NeXGold Mining Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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