Correlation Between Micron Technology and Cohen Circle

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

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

Diversification Opportunities for Micron Technology and Cohen Circle

0.5

Correlation Coefficient

Micron Technology  Cohen Circle

Very weak diversification

The 3 months correlation between Micron and Cohen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Cohen Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Circle Acquisition 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 Cohen Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Circle Acquisition has no effect on the direction of Micron Technology i.e., Micron Technology and Cohen Circle go up and down completely randomly.

Pair Corralation between Micron Technology and Cohen Circle

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 5.15 times less return on investment than Cohen Circle. But when comparing it to its historical volatility, Micron Technology is 5.67 times less risky than Cohen Circle. It trades about 0.3 of its potential returns per unit of risk. Cohen Circle Acquisition is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  44.00  in Cohen Circle Acquisition on October 20, 2024 and sell it today you would earn a total of  31.00  from holding Cohen Circle Acquisition or generate 70.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.0%
Values	Daily Returns

Micron Technology  vs.  Cohen Circle Acquisition

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 comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Cohen Circle Acquisition

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Cohen Circle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Cohen Circle

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

The idea behind Micron Technology and Cohen Circle Acquisition 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.