Correlation Between Micron Technology and Eaton Vance

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

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

Diversification Opportunities for Micron Technology and Eaton Vance

0.49

Correlation Coefficient

Micron Technology  Eaton Vance

Very weak diversification

The 3 months correlation between Micron and Eaton is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Eaton Vance Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Large 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Large has no effect on the direction of Micron Technology i.e., Micron Technology and Eaton Vance go up and down completely randomly.

Pair Corralation between Micron Technology and Eaton Vance

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 4.22 times more return on investment than Eaton Vance. However, Micron Technology is 4.22 times more volatile than Eaton Vance Large Cap. It trades about 0.0 of its potential returns per unit of risk. Eaton Vance Large Cap is currently generating about -0.12 per unit of risk. If you would invest  10,418  in Micron Technology on October 15, 2024 and sell it today you would lose (484.00) from holding Micron Technology or give up 4.65% of portfolio value over 90 days.

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

Micron Technology  vs.  Eaton Vance Large Cap

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.

Eaton Vance Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Micron Technology and Eaton Vance

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

The idea behind Micron Technology and Eaton Vance Large Cap 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..