Correlation Between Micron Technology and Esso (Thailand)
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Esso (Thailand) 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 Esso (Thailand) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Esso Public, you can compare the effects of market volatilities on Micron Technology and Esso (Thailand) 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 Esso (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Esso (Thailand).
Diversification Opportunities for Micron Technology and Esso (Thailand)
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and Esso is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Esso Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso (Thailand) 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 Esso (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso (Thailand) has no effect on the direction of Micron Technology i.e., Micron Technology and Esso (Thailand) go up and down completely randomly.
Pair Corralation between Micron Technology and Esso (Thailand)
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Esso (Thailand). In addition to that, Micron Technology is 1.69 times more volatile than Esso Public. It trades about -0.15 of its total potential returns per unit of risk. Esso Public is currently generating about 0.01 per unit of volatility. If you would invest 20.00 in Esso Public on September 22, 2024 and sell it today you would earn a total of 0.00 from holding Esso Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Micron Technology vs. Esso Public
Performance |
| Timeline |
| Micron Technology |
| Esso (Thailand) |
Micron Technology and Esso (Thailand) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Esso (Thailand)
The main advantage of trading using opposite Micron Technology and Esso (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Esso (Thailand) 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 Esso (Thailand) will offset losses from the drop in Esso (Thailand)'s long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Esso (Thailand) vs. Superior Plus Corp | Esso (Thailand) vs. SIVERS SEMICONDUCTORS AB | Esso (Thailand) vs. Norsk Hydro ASA | Esso (Thailand) vs. Reliance Steel Aluminum |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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