Correlation Between Micron Technology and Aberdeen New

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

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

Diversification Opportunities for Micron Technology and Aberdeen New

-0.23

Correlation Coefficient

Micron Technology  Aberdeen New

Very good diversification

The 3 months correlation between Micron and Aberdeen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Aberdeen New India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen New India 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 Aberdeen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen New India has no effect on the direction of Micron Technology i.e., Micron Technology and Aberdeen New go up and down completely randomly.

Pair Corralation between Micron Technology and Aberdeen New

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 3.1 times more return on investment than Aberdeen New. However, Micron Technology is 3.1 times more volatile than Aberdeen New India. It trades about 0.05 of its potential returns per unit of risk. Aberdeen New India is currently generating about -0.09 per unit of risk. If you would invest  8,531  in Micron Technology on December 29, 2024 and sell it today you would earn a total of  585.00  from holding Micron Technology or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Micron Technology  vs.  Aberdeen New India

Micron Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aberdeen New India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen New India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Micron Technology and Aberdeen New

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

The idea behind Micron Technology and Aberdeen New India 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.