Correlation Between Micron Technology, and Sparx Technology

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

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

Diversification Opportunities for Micron Technology, and Sparx Technology

0.19

Correlation Coefficient

Micron Technology,  Sparx Technology

Average diversification

The 3 months correlation between Micron and Sparx is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology, and Sparx Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparx Technology 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 Sparx Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparx Technology has no effect on the direction of Micron Technology, i.e., Micron Technology, and Sparx Technology go up and down completely randomly.

Pair Corralation between Micron Technology, and Sparx Technology

Assuming the 90 days trading horizon Micron Technology, is expected to generate 1.06 times more return on investment than Sparx Technology. However, Micron Technology, is 1.06 times more volatile than Sparx Technology. It trades about 0.07 of its potential returns per unit of risk. Sparx Technology is currently generating about -0.11 per unit of risk. If you would invest  2,068  in Micron Technology, on December 20, 2024 and sell it today you would earn a total of  275.00  from holding Micron Technology, or generate 13.3% return on investment over 90 days.

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

Micron Technology,  vs.  Sparx Technology

Micron Technology,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Micron Technology, displayed solid returns over the last few months and may actually be approaching a breakup point.

Sparx Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sparx Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Micron Technology, and Sparx Technology

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

The idea behind Micron Technology, and Sparx 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.