Correlation Between Micron Technology and Intercontinental
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Intercontinental 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 Intercontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Intercontinental Exchange, you can compare the effects of market volatilities on Micron Technology and Intercontinental 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 Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Intercontinental.
Diversification Opportunities for Micron Technology and Intercontinental
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Micron and Intercontinental is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange 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 Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of Micron Technology i.e., Micron Technology and Intercontinental go up and down completely randomly.
Pair Corralation between Micron Technology and Intercontinental
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Intercontinental. In addition to that, Micron Technology is 2.3 times more volatile than Intercontinental Exchange. It trades about -0.12 of its total potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.07 per unit of volatility. If you would invest 14,822 in Intercontinental Exchange on September 12, 2024 and sell it today you would earn a total of 214.00 from holding Intercontinental Exchange or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Micron Technology vs. Intercontinental Exchange
Performance |
| Timeline |
| Micron Technology |
| Intercontinental Exchange |
Micron Technology and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Intercontinental
The main advantage of trading using opposite Micron Technology and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Intercontinental 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 Intercontinental will offset losses from the drop in Intercontinental's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Intercontinental vs. Bumrungrad Hospital Public | Intercontinental vs. Virtus Investment Partners | Intercontinental vs. DiamondRock Hospitality | Intercontinental vs. YOOMA WELLNESS INC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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