Correlation Between Micron Technology and Intel
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Intel, you can compare the effects of market volatilities on Micron Technology and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Intel.
Diversification Opportunities for Micron Technology and Intel
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Micron and Intel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Micron Technology i.e., Micron Technology and Intel go up and down completely randomly.
Pair Corralation between Micron Technology and Intel
Assuming the 90 days trading horizon Micron Technology is expected to under-perform the Intel. In addition to that, Micron Technology is 1.3 times more volatile than Intel. It trades about -0.13 of its total potential returns per unit of risk. Intel is currently generating about -0.1 per unit of volatility. If you would invest 2,024 in Intel on November 9, 2024 and sell it today you would lose (160.00) from holding Intel or give up 7.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Intel
Performance |
| Timeline |
| Micron Technology |
| Intel |
Micron Technology and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Intel
The main advantage of trading using opposite Micron Technology and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. NVIDIA | Micron Technology vs. Broadcom | Micron Technology vs. Texas Instruments Incorporated |
| Intel vs. Mitsubishi UFJ Financial | Intel vs. Sumitomo Mitsui Financial | Intel vs. Deutsche Bank Aktiengesellschaft | Intel vs. Truist Financial |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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