Correlation Between Micron Technology and Invesco Main
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Invesco Main 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 Invesco Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Invesco Main Street, you can compare the effects of market volatilities on Micron Technology and Invesco Main 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 Invesco Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Invesco Main.
Diversification Opportunities for Micron Technology and Invesco Main
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Micron and Invesco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Invesco Main Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Main Street 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 Invesco Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Main Street has no effect on the direction of Micron Technology i.e., Micron Technology and Invesco Main go up and down completely randomly.
Pair Corralation between Micron Technology and Invesco Main
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.6 times more return on investment than Invesco Main. However, Micron Technology is 1.6 times more volatile than Invesco Main Street. It trades about 0.07 of its potential returns per unit of risk. Invesco Main Street is currently generating about -0.11 per unit of risk. If you would invest 9,918 in Micron Technology on September 15, 2024 and sell it today you would earn a total of 332.00 from holding Micron Technology or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Invesco Main Street
Performance |
| Timeline |
| Micron Technology |
| Invesco Main Street |
Micron Technology and Invesco Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Invesco Main
The main advantage of trading using opposite Micron Technology and Invesco Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Invesco Main 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 Invesco Main will offset losses from the drop in Invesco Main's long position.| Micron Technology vs. Globalfoundries | Micron Technology vs. Wisekey International Holding | Micron Technology vs. Nano Labs | Micron Technology vs. SemiLEDS |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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