Correlation Between Micron Technology and ATT

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

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

Diversification Opportunities for Micron Technology and ATT

0.0

Correlation Coefficient

Micron Technology  ATT

Pay attention - limited upside

The 3 months correlation between Micron and ATT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Micron Technology 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 Micron Technology are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Micron Technology i.e., Micron Technology and ATT go up and down completely randomly.

Pair Corralation between Micron Technology and ATT

If you would invest (100.00) in ATT Inc on October 9, 2024 and sell it today you would earn a total of  100.00  from holding ATT Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Micron Technology  vs.  ATT Inc

Micron Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Micron Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ATT Inc

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, ATT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Micron Technology and ATT

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

The idea behind Micron Technology and ATT 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.