Correlation Between Micron Technology and Livetech
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Livetech 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 Livetech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Livetech da Bahia, you can compare the effects of market volatilities on Micron Technology and Livetech 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 Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Livetech.
Diversification Opportunities for Micron Technology and Livetech
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Micron and Livetech is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia 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 Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of Micron Technology i.e., Micron Technology and Livetech go up and down completely randomly.
Pair Corralation between Micron Technology and Livetech
Assuming the 90 days trading horizon Micron Technology is expected to generate 0.95 times more return on investment than Livetech. However, Micron Technology is 1.05 times less risky than Livetech. It trades about 0.06 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.02 per unit of risk. If you would invest 4,799 in Micron Technology on August 30, 2024 and sell it today you would earn a total of 4,896 from holding Micron Technology or generate 102.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. Livetech da Bahia
Performance |
| Timeline |
| Micron Technology |
| Livetech da Bahia |
Micron Technology and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Livetech
The main advantage of trading using opposite Micron Technology and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech's long position.| Micron Technology vs. GP Investments | Micron Technology vs. Lupatech SA | Micron Technology vs. Marvell Technology | Micron Technology vs. Livetech da Bahia |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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