Correlation Between Micron Technology and Acanthe Dveloppement

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

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

Diversification Opportunities for Micron Technology and Acanthe Dveloppement

0.62

Correlation Coefficient

Micron Technology  Acanthe Dveloppement

Poor diversification

The 3 months correlation between Micron and Acanthe is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Acanthe Dveloppement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acanthe Dveloppement 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 Acanthe Dveloppement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acanthe Dveloppement has no effect on the direction of Micron Technology i.e., Micron Technology and Acanthe Dveloppement go up and down completely randomly.

Pair Corralation between Micron Technology and Acanthe Dveloppement

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.47 times less return on investment than Acanthe Dveloppement. But when comparing it to its historical volatility, Micron Technology is 2.7 times less risky than Acanthe Dveloppement. It trades about 0.05 of its potential returns per unit of risk. Acanthe Dveloppement is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Acanthe Dveloppement on October 7, 2024 and sell it today you would earn a total of  9.00  from holding Acanthe Dveloppement or generate 40.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Micron Technology  vs.  Acanthe Dveloppement

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Acanthe Dveloppement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acanthe Dveloppement has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Micron Technology and Acanthe Dveloppement

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

The idea behind Micron Technology and Acanthe Dveloppement 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.