Correlation Between Micron Technology and Cambiar Smid

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

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

Diversification Opportunities for Micron Technology and Cambiar Smid

0.39

Correlation Coefficient

Micron Technology  Cambiar Smid

Weak diversification

The 3 months correlation between Micron and Cambiar is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid 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 Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Micron Technology i.e., Micron Technology and Cambiar Smid go up and down completely randomly.

Pair Corralation between Micron Technology and Cambiar Smid

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 4.37 times more return on investment than Cambiar Smid. However, Micron Technology is 4.37 times more volatile than Cambiar Smid Fund. It trades about 0.08 of its potential returns per unit of risk. Cambiar Smid Fund is currently generating about -0.03 per unit of risk. If you would invest  8,960  in Micron Technology on December 21, 2024 and sell it today you would earn a total of  1,340  from holding Micron Technology or generate 14.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Micron Technology  vs.  Cambiar Smid Fund

Micron Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cambiar Smid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cambiar Smid Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Cambiar Smid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Micron Technology and Cambiar Smid

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

The idea behind Micron Technology and Cambiar Smid Fund 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.