Correlation Between Micron Technology and Mfs New
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Mfs New 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 Mfs New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Mfs New Discovery, you can compare the effects of market volatilities on Micron Technology and Mfs New 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 Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Mfs New.
Diversification Opportunities for Micron Technology and Mfs New
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Micron and Mfs is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery 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 Mfs New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Micron Technology i.e., Micron Technology and Mfs New go up and down completely randomly.
Pair Corralation between Micron Technology and Mfs New
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.54 times more return on investment than Mfs New. However, Micron Technology is 2.54 times more volatile than Mfs New Discovery. It trades about 0.06 of its potential returns per unit of risk. Mfs New Discovery is currently generating about 0.04 per unit of risk. If you would invest 6,431 in Micron Technology on September 12, 2024 and sell it today you would earn a total of 3,851 from holding Micron Technology or generate 59.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Micron Technology vs. Mfs New Discovery
Performance |
| Timeline |
| Micron Technology |
| Mfs New Discovery |
Micron Technology and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Mfs New
The main advantage of trading using opposite Micron Technology and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Mfs New 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 Mfs New will offset losses from the drop in Mfs New's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Mfs New vs. Federated Hermes Inflation | Mfs New vs. Guggenheim Managed Futures | Mfs New vs. Simt Multi Asset Inflation | Mfs New vs. American Funds Inflation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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