Correlation Between Birchtech Corp and Micron Technology,

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

By analyzing existing cross correlation between Birchtech Corp and Micron Technology,, you can compare the effects of market volatilities on Birchtech Corp 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 Birchtech Corp with a short position of Micron Technology,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchtech Corp and Micron Technology,.

Diversification Opportunities for Birchtech Corp and Micron Technology,

0.22

Correlation Coefficient

Birchtech Corp  Micron Technology,

Modest diversification

The 3 months correlation between Birchtech and Micron is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Birchtech Corp and Micron Technology, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology, and Birchtech Corp 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 Birchtech Corp 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 Birchtech Corp i.e., Birchtech Corp and Micron Technology, go up and down completely randomly.

Pair Corralation between Birchtech Corp and Micron Technology,

Assuming the 90 days trading horizon Birchtech Corp is expected to under-perform the Micron Technology,. In addition to that, Birchtech Corp is 1.17 times more volatile than Micron Technology,. It trades about -0.09 of its total potential returns per unit of risk. Micron Technology, is currently generating about 0.06 per unit of volatility. If you would invest  2,028  in Micron Technology, on October 11, 2024 and sell it today you would earn a total of  253.00  from holding Micron Technology, or generate 12.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	54.55%
Values	Daily Returns

Birchtech Corp  vs.  Micron Technology,

Birchtech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Birchtech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Micron Technology,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micron Technology, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Micron Technology, is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Birchtech Corp and Micron Technology,

The main advantage of trading using opposite Birchtech Corp and Micron Technology, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchtech Corp 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.

The idea behind Birchtech Corp and Micron Technology, 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.