Correlation Between Micron Technology and BurgerFi International

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

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

Diversification Opportunities for Micron Technology and BurgerFi International

0.08

Correlation Coefficient

Micron Technology  BurgerFi International

Significant diversification

The 3 months correlation between Micron and BurgerFi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and BurgerFi International LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BurgerFi International 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 BurgerFi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BurgerFi International has no effect on the direction of Micron Technology i.e., Micron Technology and BurgerFi International go up and down completely randomly.

Pair Corralation between Micron Technology and BurgerFi International

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the BurgerFi International. But the stock apears to be less risky and, when comparing its historical volatility, Micron Technology is 8.34 times less risky than BurgerFi International. The stock trades about -0.02 of its potential returns per unit of risk. The BurgerFi International LLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2.57  in BurgerFi International LLC on September 27, 2024 and sell it today you would lose (1.67) from holding BurgerFi International LLC or give up 64.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.12%
Values	Daily Returns

Micron Technology  vs.  BurgerFi International LLC

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BurgerFi International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BurgerFi International LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, BurgerFi International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Micron Technology and BurgerFi International

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

The idea behind Micron Technology and BurgerFi International LLC 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.