Correlation Between Polar Capital and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Polar Capital and Micron Technology 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 Polar Capital and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Capital Technology and Micron Technology, you can compare the effects of market volatilities on Polar Capital and Micron Technology 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 Polar Capital with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Capital and Micron Technology.
Diversification Opportunities for Polar Capital and Micron Technology
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Polar and Micron is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Polar Capital Technology and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Polar Capital 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 Polar Capital Technology are associated (or correlated) with Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Polar Capital i.e., Polar Capital and Micron Technology go up and down completely randomly.
Pair Corralation between Polar Capital and Micron Technology
Assuming the 90 days trading horizon Polar Capital Technology is expected to generate 0.44 times more return on investment than Micron Technology. However, Polar Capital Technology is 2.25 times less risky than Micron Technology. It trades about 0.1 of its potential returns per unit of risk. Micron Technology is currently generating about 0.04 per unit of risk. If you would invest 19,620 in Polar Capital Technology on November 1, 2024 and sell it today you would earn a total of 16,680 from holding Polar Capital Technology or generate 85.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Polar Capital Technology vs. Micron Technology
Performance |
| Timeline |
| Polar Capital Technology |
| Micron Technology |
Polar Capital and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Capital and Micron Technology
The main advantage of trading using opposite Polar Capital and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Capital position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| Polar Capital vs. Veolia Environnement VE | Polar Capital vs. Software Circle plc | Polar Capital vs. Vitec Software Group | Polar Capital vs. Dentsply Sirona |
| Micron Technology vs. Polar Capital Technology | Micron Technology vs. Indutrade AB | Micron Technology vs. DXC Technology Co | Micron Technology vs. Xeros Technology 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 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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