Correlation Between Micron Technology and Borusan Mannesmann
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Borusan Mannesmann 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 Borusan Mannesmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Borusan Mannesmann Boru, you can compare the effects of market volatilities on Micron Technology and Borusan Mannesmann 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 Borusan Mannesmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Borusan Mannesmann.
Diversification Opportunities for Micron Technology and Borusan Mannesmann
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Micron and Borusan is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Borusan Mannesmann Boru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borusan Mannesmann Boru 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 Borusan Mannesmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borusan Mannesmann Boru has no effect on the direction of Micron Technology i.e., Micron Technology and Borusan Mannesmann go up and down completely randomly.
Pair Corralation between Micron Technology and Borusan Mannesmann
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Borusan Mannesmann. In addition to that, Micron Technology is 4.35 times more volatile than Borusan Mannesmann Boru. It trades about -0.13 of its total potential returns per unit of risk. Borusan Mannesmann Boru is currently generating about -0.32 per unit of volatility. If you would invest 46,900 in Borusan Mannesmann Boru on September 24, 2024 and sell it today you would lose (3,375) from holding Borusan Mannesmann Boru or give up 7.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Micron Technology vs. Borusan Mannesmann Boru
Performance |
Timeline |
Micron Technology |
Borusan Mannesmann Boru |
Micron Technology and Borusan Mannesmann Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and Borusan Mannesmann
The main advantage of trading using opposite Micron Technology and Borusan Mannesmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Borusan Mannesmann 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 Borusan Mannesmann will offset losses from the drop in Borusan Mannesmann's long position.Micron Technology vs. Diodes Incorporated | Micron Technology vs. Daqo New Energy | Micron Technology vs. MagnaChip Semiconductor | Micron Technology vs. Nano Labs |
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Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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