Correlation Between Micron Technology and JPMF Global
Can any of the company-specific risk be diversified away by investing in both Micron Technology and JPMF Global 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 JPMF Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and JPMF Global Natural, you can compare the effects of market volatilities on Micron Technology and JPMF Global 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 JPMF Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and JPMF Global.
Diversification Opportunities for Micron Technology and JPMF Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micron and JPMF is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and JPMF Global Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMF Global Natural 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 JPMF Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMF Global Natural has no effect on the direction of Micron Technology i.e., Micron Technology and JPMF Global go up and down completely randomly.
Pair Corralation between Micron Technology and JPMF Global
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 4.82 times more return on investment than JPMF Global. However, Micron Technology is 4.82 times more volatile than JPMF Global Natural. It trades about 0.3 of its potential returns per unit of risk. JPMF Global Natural is currently generating about 0.71 per unit of risk. If you would invest 8,698 in Micron Technology on October 20, 2024 and sell it today you would earn a total of 1,877 from holding Micron Technology or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Micron Technology vs. JPMF Global Natural
Performance |
| Timeline |
| Micron Technology |
| JPMF Global Natural |
Micron Technology and JPMF Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and JPMF Global
The main advantage of trading using opposite Micron Technology and JPMF Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, JPMF Global 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 JPMF Global will offset losses from the drop in JPMF Global's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| JPMF Global vs. Azvalor Global Value | JPMF Global vs. JPM Global Natural | JPMF Global vs. BGF Global Allocation | JPMF Global vs. Cobas Global PP |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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