Correlation Between Micron Technology and Comcast
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Comcast 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 Comcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Comcast, you can compare the effects of market volatilities on Micron Technology and Comcast 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 Comcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Comcast.
Diversification Opportunities for Micron Technology and Comcast
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micron and Comcast is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Comcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast 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 Comcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast has no effect on the direction of Micron Technology i.e., Micron Technology and Comcast go up and down completely randomly.
Pair Corralation between Micron Technology and Comcast
Assuming the 90 days trading horizon Micron Technology is expected to generate 1.19 times more return on investment than Comcast. However, Micron Technology is 1.19 times more volatile than Comcast. It trades about -0.02 of its potential returns per unit of risk. Comcast is currently generating about -0.12 per unit of risk. If you would invest 10,450 in Micron Technology on September 12, 2024 and sell it today you would lose (245.00) from holding Micron Technology or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Comcast
Performance |
| Timeline |
| Micron Technology |
| Comcast |
Micron Technology and Comcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Comcast
The main advantage of trading using opposite Micron Technology and Comcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Comcast 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 Comcast will offset losses from the drop in Comcast's long position.| Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Broadcom | Micron Technology vs. Advanced Micro Devices | Micron Technology vs. NXP Semiconductors NV |
| Comcast vs. Verizon Communications | Comcast vs. Take Two Interactive Software | Comcast vs. BIONTECH SE DRN | Comcast vs. MAHLE Metal Leve |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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