Correlation Between Micron Technology and SYLVANIA PLAT

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

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

Diversification Opportunities for Micron Technology and SYLVANIA PLAT

0.53

Correlation Coefficient

Micron Technology  SYLVANIA PLAT

Very weak diversification

The 3 months correlation between Micron and SYLVANIA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and SYLVANIA PLAT DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYLVANIA PLAT DL 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 SYLVANIA PLAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYLVANIA PLAT DL has no effect on the direction of Micron Technology i.e., Micron Technology and SYLVANIA PLAT go up and down completely randomly.

Pair Corralation between Micron Technology and SYLVANIA PLAT

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 0.7 times more return on investment than SYLVANIA PLAT. However, Micron Technology is 1.44 times less risky than SYLVANIA PLAT. It trades about 0.04 of its potential returns per unit of risk. SYLVANIA PLAT DL is currently generating about -0.02 per unit of risk. If you would invest  5,663  in Micron Technology on October 3, 2024 and sell it today you would earn a total of  2,868  from holding Micron Technology or generate 50.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.61%
Values	Daily Returns

Micron Technology  vs.  SYLVANIA PLAT DL

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SYLVANIA PLAT DL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SYLVANIA PLAT DL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Micron Technology and SYLVANIA PLAT

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

The idea behind Micron Technology and SYLVANIA PLAT DL 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.