Correlation Between Micron Technology and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Micron Technology and SSgA SPDR 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 SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and SSgA SPDR ETFs, you can compare the effects of market volatilities on Micron Technology and SSgA SPDR 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 SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and SSgA SPDR.
Diversification Opportunities for Micron Technology and SSgA SPDR
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Micron and SSgA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs 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 SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Micron Technology i.e., Micron Technology and SSgA SPDR go up and down completely randomly.
Pair Corralation between Micron Technology and SSgA SPDR
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.49 times more return on investment than SSgA SPDR. However, Micron Technology is 2.49 times more volatile than SSgA SPDR ETFs. It trades about 0.04 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.02 per unit of risk. If you would invest 9,992 in Micron Technology on September 14, 2024 and sell it today you would earn a total of 125.00 from holding Micron Technology or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Micron Technology |
| SSgA SPDR ETFs |
Micron Technology and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and SSgA SPDR
The main advantage of trading using opposite Micron Technology and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| SSgA SPDR vs. SPDR Dow Jones | SSgA SPDR vs. iShares Core MSCI | SSgA SPDR vs. iShares SP 500 | SSgA SPDR vs. iShares Core MSCI |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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