Correlation Between Micron Technology and Akcansa Cimento

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

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

Diversification Opportunities for Micron Technology and Akcansa Cimento

-0.47

Correlation Coefficient

Micron Technology  Akcansa Cimento

Very good diversification

The 3 months correlation between Micron and Akcansa is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Akcansa Cimento Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akcansa Cimento Sanayi 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 Akcansa Cimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akcansa Cimento Sanayi has no effect on the direction of Micron Technology i.e., Micron Technology and Akcansa Cimento go up and down completely randomly.

Pair Corralation between Micron Technology and Akcansa Cimento

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.61 times more return on investment than Akcansa Cimento. However, Micron Technology is 2.61 times more volatile than Akcansa Cimento Sanayi. It trades about 0.3 of its potential returns per unit of risk. Akcansa Cimento Sanayi is currently generating about 0.2 per unit of risk. If you would invest  8,698  in Micron Technology on October 20, 2024 and sell it today you would earn a total of  1,877  from holding Micron Technology or generate 21.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.91%
Values	Daily Returns

Micron Technology  vs.  Akcansa Cimento Sanayi

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 comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Akcansa Cimento Sanayi

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akcansa Cimento Sanayi are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Akcansa Cimento demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Akcansa Cimento

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

The idea behind Micron Technology and Akcansa Cimento Sanayi 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.