Correlation Between Micron Technology, and IA Financial

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

By analyzing existing cross correlation between Micron Technology, and iA Financial, you can compare the effects of market volatilities on Micron Technology, and IA Financial 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 IA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology, and IA Financial.

Diversification Opportunities for Micron Technology, and IA Financial

-0.43

Correlation Coefficient

Micron Technology,  IA Financial

Very good diversification

The 3 months correlation between Micron and IAG is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology, and iA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iA Financial 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 IA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iA Financial has no effect on the direction of Micron Technology, i.e., Micron Technology, and IA Financial go up and down completely randomly.

Pair Corralation between Micron Technology, and IA Financial

Assuming the 90 days trading horizon Micron Technology, is expected to generate 7.32 times more return on investment than IA Financial. However, Micron Technology, is 7.32 times more volatile than iA Financial. It trades about 0.02 of its potential returns per unit of risk. iA Financial is currently generating about -0.28 per unit of risk. If you would invest  2,365  in Micron Technology, on October 9, 2024 and sell it today you would lose (22.00) from holding Micron Technology, or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Micron Technology,  vs.  iA Financial

Micron Technology,

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Micron Technology, is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

iA Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iA Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, IA Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology, and IA Financial

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

The idea behind Micron Technology, and iA Financial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.