Correlation Between Micron Technology and Cardiol Therapeutics

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

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

Diversification Opportunities for Micron Technology and Cardiol Therapeutics

0.67

Correlation Coefficient

Micron Technology  Cardiol Therapeutics

Poor diversification

The 3 months correlation between Micron and Cardiol is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Cardiol Therapeutics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiol Therapeutics 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 Cardiol Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiol Therapeutics has no effect on the direction of Micron Technology i.e., Micron Technology and Cardiol Therapeutics go up and down completely randomly.

Pair Corralation between Micron Technology and Cardiol Therapeutics

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Cardiol Therapeutics. In addition to that, Micron Technology is 1.56 times more volatile than Cardiol Therapeutics Class. It trades about -0.1 of its total potential returns per unit of risk. Cardiol Therapeutics Class is currently generating about 0.01 per unit of volatility. If you would invest  144.00  in Cardiol Therapeutics Class on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Cardiol Therapeutics Class or generate 0.0% return on investment over 90 days.

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

Micron Technology  vs.  Cardiol Therapeutics Class

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Cardiol Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardiol Therapeutics Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Micron Technology and Cardiol Therapeutics

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

The idea behind Micron Technology and Cardiol Therapeutics Class 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..