Correlation Between Micron Technology and Nava Nakorn
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Nava Nakorn 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 Nava Nakorn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Nava Nakorn Public, you can compare the effects of market volatilities on Micron Technology and Nava Nakorn 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 Nava Nakorn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Nava Nakorn.
Diversification Opportunities for Micron Technology and Nava Nakorn
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Micron and Nava is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Nava Nakorn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nava Nakorn Public 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 Nava Nakorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nava Nakorn Public has no effect on the direction of Micron Technology i.e., Micron Technology and Nava Nakorn go up and down completely randomly.
Pair Corralation between Micron Technology and Nava Nakorn
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.69 times more return on investment than Nava Nakorn. However, Micron Technology is 1.69 times more volatile than Nava Nakorn Public. It trades about -0.03 of its potential returns per unit of risk. Nava Nakorn Public is currently generating about -0.18 per unit of risk. If you would invest 10,410 in Micron Technology on September 13, 2024 and sell it today you would lose (204.00) from holding Micron Technology or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Micron Technology vs. Nava Nakorn Public
Performance |
| Timeline |
| Micron Technology |
| Nava Nakorn Public |
Micron Technology and Nava Nakorn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Nava Nakorn
The main advantage of trading using opposite Micron Technology and Nava Nakorn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Nava Nakorn 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 Nava Nakorn will offset losses from the drop in Nava Nakorn's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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