Correlation Between Micron Technology and Cambi ASA
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Cambi ASA 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 Cambi ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Cambi ASA, you can compare the effects of market volatilities on Micron Technology and Cambi ASA 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 Cambi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Cambi ASA.
Diversification Opportunities for Micron Technology and Cambi ASA
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Micron and Cambi is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Cambi ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambi ASA 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 Cambi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambi ASA has no effect on the direction of Micron Technology i.e., Micron Technology and Cambi ASA go up and down completely randomly.
Pair Corralation between Micron Technology and Cambi ASA
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.05 times less return on investment than Cambi ASA. In addition to that, Micron Technology is 1.33 times more volatile than Cambi ASA. It trades about 0.05 of its total potential returns per unit of risk. Cambi ASA is currently generating about 0.13 per unit of volatility. If you would invest 1,450 in Cambi ASA on December 28, 2024 and sell it today you would earn a total of 350.00 from holding Cambi ASA or generate 24.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Micron Technology vs. Cambi ASA
Performance |
Timeline |
Micron Technology |
Cambi ASA |
Micron Technology and Cambi ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and Cambi ASA
The main advantage of trading using opposite Micron Technology and Cambi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Cambi ASA 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 Cambi ASA will offset losses from the drop in Cambi ASA's long position.Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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