Correlation Between Micron Technology and ZTO EXPRESS
Can any of the company-specific risk be diversified away by investing in both Micron Technology and ZTO EXPRESS 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 ZTO EXPRESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and ZTO EXPRESS, you can compare the effects of market volatilities on Micron Technology and ZTO EXPRESS 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 ZTO EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and ZTO EXPRESS.
Diversification Opportunities for Micron Technology and ZTO EXPRESS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Micron and ZTO is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ZTO EXPRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO EXPRESS 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 ZTO EXPRESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTO EXPRESS has no effect on the direction of Micron Technology i.e., Micron Technology and ZTO EXPRESS go up and down completely randomly.
Pair Corralation between Micron Technology and ZTO EXPRESS
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 0.98 times more return on investment than ZTO EXPRESS. However, Micron Technology is 1.02 times less risky than ZTO EXPRESS. It trades about 0.04 of its potential returns per unit of risk. ZTO EXPRESS is currently generating about 0.02 per unit of risk. If you would invest 8,121 in Micron Technology on September 12, 2024 and sell it today you would earn a total of 1,689 from holding Micron Technology or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Micron Technology vs. ZTO EXPRESS
Performance |
| Timeline |
| Micron Technology |
| ZTO EXPRESS |
Micron Technology and ZTO EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and ZTO EXPRESS
The main advantage of trading using opposite Micron Technology and ZTO EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, ZTO EXPRESS 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 ZTO EXPRESS will offset losses from the drop in ZTO EXPRESS's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| ZTO EXPRESS vs. NTG Nordic Transport | ZTO EXPRESS vs. Superior Plus Corp | ZTO EXPRESS vs. SIVERS SEMICONDUCTORS AB | ZTO EXPRESS vs. NorAm Drilling AS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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