Correlation Between Micron Technology and Rivian Automotive
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Rivian Automotive 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 Rivian Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Rivian Automotive, you can compare the effects of market volatilities on Micron Technology and Rivian Automotive 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 Rivian Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Rivian Automotive.
Diversification Opportunities for Micron Technology and Rivian Automotive
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Micron and Rivian is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Rivian Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivian Automotive 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 Rivian Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivian Automotive has no effect on the direction of Micron Technology i.e., Micron Technology and Rivian Automotive go up and down completely randomly.
Pair Corralation between Micron Technology and Rivian Automotive
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 0.57 times more return on investment than Rivian Automotive. However, Micron Technology is 1.74 times less risky than Rivian Automotive. It trades about 0.06 of its potential returns per unit of risk. Rivian Automotive is currently generating about -0.01 per unit of risk. If you would invest 5,457 in Micron Technology on September 3, 2024 and sell it today you would earn a total of 4,338 from holding Micron Technology or generate 79.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Rivian Automotive
Performance |
| Timeline |
| Micron Technology |
| Rivian Automotive |
Micron Technology and Rivian Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Rivian Automotive
The main advantage of trading using opposite Micron Technology and Rivian Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Rivian Automotive 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 Rivian Automotive will offset losses from the drop in Rivian Automotive's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Rivian Automotive vs. GreenPower Motor | Rivian Automotive vs. ZEEKR Intelligent Technology | Rivian Automotive vs. Volcon Inc | Rivian Automotive vs. ECD Automotive Design |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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