Correlation Between Micron Technology and INDOSAT -B-
Can any of the company-specific risk be diversified away by investing in both Micron Technology and INDOSAT -B- 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 INDOSAT -B- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and INDOSAT B , you can compare the effects of market volatilities on Micron Technology and INDOSAT -B- 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 INDOSAT -B-. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and INDOSAT -B-.
Diversification Opportunities for Micron Technology and INDOSAT -B-
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Micron and INDOSAT is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and INDOSAT B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOSAT -B- 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 INDOSAT -B-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOSAT -B- has no effect on the direction of Micron Technology i.e., Micron Technology and INDOSAT -B- go up and down completely randomly.
Pair Corralation between Micron Technology and INDOSAT -B-
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.8 times more return on investment than INDOSAT -B-. However, Micron Technology is 1.8 times more volatile than INDOSAT B . It trades about 0.27 of its potential returns per unit of risk. INDOSAT B is currently generating about -0.25 per unit of risk. If you would invest 8,960 in Micron Technology on October 22, 2024 and sell it today you would earn a total of 1,615 from holding Micron Technology or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Micron Technology vs. INDOSAT B
Performance |
| Timeline |
| Micron Technology |
| INDOSAT -B- |
Micron Technology and INDOSAT -B- Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and INDOSAT -B-
The main advantage of trading using opposite Micron Technology and INDOSAT -B- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, INDOSAT -B- 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 INDOSAT -B- will offset losses from the drop in INDOSAT -B-'s long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| INDOSAT -B- vs. ALTAIR RES INC | INDOSAT -B- vs. Caseys General Stores | INDOSAT -B- vs. FAST RETAIL ADR | INDOSAT -B- vs. Burlington Stores |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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