Correlation Between ALTRIA and Micron Technology
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By analyzing existing cross correlation between ALTRIA GROUP INC and Micron Technology, you can compare the effects of market volatilities on ALTRIA 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 ALTRIA with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALTRIA and Micron Technology.
Diversification Opportunities for ALTRIA and Micron Technology
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALTRIA and Micron is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ALTRIA GROUP INC and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and ALTRIA 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 ALTRIA GROUP INC 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 ALTRIA i.e., ALTRIA and Micron Technology go up and down completely randomly.
Pair Corralation between ALTRIA and Micron Technology
Assuming the 90 days trading horizon ALTRIA GROUP INC is expected to under-perform the Micron Technology. But the bond apears to be less risky and, when comparing its historical volatility, ALTRIA GROUP INC is 9.0 times less risky than Micron Technology. The bond trades about -0.01 of its potential returns per unit of risk. The Micron Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,457 in Micron Technology on September 3, 2024 and sell it today you would earn a total of 4,338 from holding Micron Technology or generate 79.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
ALTRIA GROUP INC vs. Micron Technology
Performance |
| Timeline |
| ALTRIA GROUP INC |
| Micron Technology |
ALTRIA and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALTRIA and Micron Technology
The main advantage of trading using opposite ALTRIA and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALTRIA 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.| ALTRIA vs. Nok Airlines Public | ALTRIA vs. Entegris | ALTRIA vs. Elmos Semiconductor SE | ALTRIA vs. Advanced Micro Devices |
| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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