Correlation Between SOUTHERN and Micron Technology
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and Micron Technology, you can compare the effects of market volatilities on SOUTHERN 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 SOUTHERN with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Micron Technology.
Diversification Opportunities for SOUTHERN and Micron Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SOUTHERN and Micron is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and SOUTHERN 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 SOUTHERN CALIF EDISON 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 SOUTHERN i.e., SOUTHERN and Micron Technology go up and down completely randomly.
Pair Corralation between SOUTHERN and Micron Technology
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to generate 21.99 times more return on investment than Micron Technology. However, SOUTHERN is 21.99 times more volatile than Micron Technology. It trades about 0.05 of its potential returns per unit of risk. Micron Technology is currently generating about 0.07 per unit of risk. If you would invest 10,526 in SOUTHERN CALIF EDISON on September 12, 2024 and sell it today you would earn a total of 18.00 from holding SOUTHERN CALIF EDISON or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 58.38% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. Micron Technology
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| Micron Technology |
SOUTHERN and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Micron Technology
The main advantage of trading using opposite SOUTHERN and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN 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.| SOUTHERN vs. MACOM Technology Solutions | SOUTHERN vs. Nexstar Broadcasting Group | SOUTHERN vs. Ryanair Holdings PLC | SOUTHERN vs. ON Semiconductor |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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