Correlation Between Micron Technology and Victorias Secret
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Victorias Secret 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 Victorias Secret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Victorias Secret Co, you can compare the effects of market volatilities on Micron Technology and Victorias Secret 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 Victorias Secret. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Victorias Secret.
Diversification Opportunities for Micron Technology and Victorias Secret
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Micron and Victorias is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret 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 Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of Micron Technology i.e., Micron Technology and Victorias Secret go up and down completely randomly.
Pair Corralation between Micron Technology and Victorias Secret
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Victorias Secret. In addition to that, Micron Technology is 1.08 times more volatile than Victorias Secret Co. It trades about -0.13 of its total potential returns per unit of risk. Victorias Secret Co is currently generating about 0.48 per unit of volatility. If you would invest 2,850 in Victorias Secret Co on August 30, 2024 and sell it today you would earn a total of 900.00 from holding Victorias Secret Co or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Micron Technology vs. Victorias Secret Co
Performance |
| Timeline |
| Micron Technology |
| Victorias Secret |
Micron Technology and Victorias Secret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Victorias Secret
The main advantage of trading using opposite Micron Technology and Victorias Secret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Victorias Secret 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 Victorias Secret will offset losses from the drop in Victorias Secret's long position.| Micron Technology vs. First Solar | Micron Technology vs. Sunrun Inc | Micron Technology vs. Canadian Solar | Micron Technology vs. SolarEdge Technologies |
| Victorias Secret vs. Capri Holdings | Victorias Secret vs. Movado Group | Victorias Secret vs. Tapestry | Victorias Secret vs. Brilliant Earth Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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