Correlation Between Stanley Electric and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Stanley Electric 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 Stanley Electric and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stanley Electric Co and Micron Technology, you can compare the effects of market volatilities on Stanley Electric 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 Stanley Electric with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stanley Electric and Micron Technology.
Diversification Opportunities for Stanley Electric and Micron Technology
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stanley and Micron is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Stanley Electric Co and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Stanley Electric 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 Stanley Electric Co 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 Stanley Electric i.e., Stanley Electric and Micron Technology go up and down completely randomly.
Pair Corralation between Stanley Electric and Micron Technology
Assuming the 90 days trading horizon Stanley Electric Co is expected to generate 0.46 times more return on investment than Micron Technology. However, Stanley Electric Co is 2.17 times less risky than Micron Technology. It trades about 0.06 of its potential returns per unit of risk. Micron Technology is currently generating about -0.07 per unit of risk. If you would invest 1,483 in Stanley Electric Co on January 10, 2025 and sell it today you would earn a total of 47.00 from holding Stanley Electric Co or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stanley Electric Co vs. Micron Technology
Performance |
| Timeline |
| Stanley Electric |
| Micron Technology |
Stanley Electric and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stanley Electric and Micron Technology
The main advantage of trading using opposite Stanley Electric and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stanley Electric 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.| Stanley Electric vs. Cars Inc | Stanley Electric vs. Shenandoah Telecommunications | Stanley Electric vs. COMMERCIAL VEHICLE | Stanley Electric vs. Verizon Communications |
| Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc | Micron Technology vs. Apple Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |