Correlation Between Micron Technology and ArcelorMittal South

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

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

Diversification Opportunities for Micron Technology and ArcelorMittal South

0.13

Correlation Coefficient

Micron Technology  ArcelorMittal South

Average diversification

The 3 months correlation between Micron and ArcelorMittal is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ArcelorMittal South Africa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal South 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 ArcelorMittal South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal South has no effect on the direction of Micron Technology i.e., Micron Technology and ArcelorMittal South go up and down completely randomly.

Pair Corralation between Micron Technology and ArcelorMittal South

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 0.94 times more return on investment than ArcelorMittal South. However, Micron Technology is 1.07 times less risky than ArcelorMittal South. It trades about -0.01 of its potential returns per unit of risk. ArcelorMittal South Africa is currently generating about -0.62 per unit of risk. If you would invest  8,992  in Micron Technology on December 4, 2024 and sell it today you would lose (166.00) from holding Micron Technology or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Micron Technology  vs.  ArcelorMittal South Africa

Micron Technology

Risk-Adjusted Performance

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.

ArcelorMittal South

Risk-Adjusted Performance

Very Weak

Over the last 90 days ArcelorMittal South Africa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Micron Technology and ArcelorMittal South

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

The idea behind Micron Technology and ArcelorMittal South Africa 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.