Correlation Between BigBearai Holdings and MICRON

Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and MICRON 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 BigBearai Holdings and MICRON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BigBearai Holdings and MICRON TECHNOLOGY INC, you can compare the effects of market volatilities on BigBearai Holdings and MICRON 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 BigBearai Holdings with a short position of MICRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and MICRON.

Diversification Opportunities for BigBearai Holdings and MICRON

0.12

Correlation Coefficient

BigBearai Holdings  MICRON

Average diversification

The 3 months correlation between BigBearai and MICRON is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and MICRON TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRON TECHNOLOGY INC and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with MICRON. 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 INC has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and MICRON go up and down completely randomly.

Pair Corralation between BigBearai Holdings and MICRON

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 25.75 times more return on investment than MICRON. However, BigBearai Holdings is 25.75 times more volatile than MICRON TECHNOLOGY INC. It trades about 0.02 of its potential returns per unit of risk. MICRON TECHNOLOGY INC is currently generating about -0.01 per unit of risk. If you would invest  445.00  in BigBearai Holdings on December 26, 2024 and sell it today you would lose (94.00) from holding BigBearai Holdings or give up 21.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

BigBearai Holdings  vs.  MICRON TECHNOLOGY INC

BigBearai Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MICRON TECHNOLOGY INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days MICRON TECHNOLOGY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MICRON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BigBearai Holdings and MICRON

The main advantage of trading using opposite BigBearai Holdings and MICRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, MICRON 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 will offset losses from the drop in MICRON's long position.

The idea behind BigBearai Holdings and MICRON TECHNOLOGY INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.