Correlation Between Micron Technology and ETFS Metal
Can any of the company-specific risk be diversified away by investing in both Micron Technology and ETFS Metal 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 ETFS Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and ETFS Metal Securities, you can compare the effects of market volatilities on Micron Technology and ETFS Metal 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 ETFS Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and ETFS Metal.
Diversification Opportunities for Micron Technology and ETFS Metal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Micron and ETFS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ETFS Metal Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Metal Securities 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 ETFS Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Metal Securities has no effect on the direction of Micron Technology i.e., Micron Technology and ETFS Metal go up and down completely randomly.
Pair Corralation between Micron Technology and ETFS Metal
If you would invest 8,970 in Micron Technology on December 26, 2024 and sell it today you would earn a total of 448.00 from holding Micron Technology or generate 4.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Micron Technology vs. ETFS Metal Securities
Performance |
Timeline |
Micron Technology |
ETFS Metal Securities |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Micron Technology and ETFS Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and ETFS Metal
The main advantage of trading using opposite Micron Technology and ETFS Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, ETFS Metal 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 ETFS Metal will offset losses from the drop in ETFS Metal's long position.Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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