Correlation Between Micron Technology and General Mills
Can any of the company-specific risk be diversified away by investing in both Micron Technology and General Mills 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 General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and General Mills, you can compare the effects of market volatilities on Micron Technology and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and General Mills.
Diversification Opportunities for Micron Technology and General Mills
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Micron and General is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of Micron Technology i.e., Micron Technology and General Mills go up and down completely randomly.
Pair Corralation between Micron Technology and General Mills
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the General Mills. In addition to that, Micron Technology is 2.25 times more volatile than General Mills. It trades about -0.07 of its total potential returns per unit of risk. General Mills is currently generating about 0.14 per unit of volatility. If you would invest 8,047 in General Mills on September 23, 2024 and sell it today you would earn a total of 847.00 from holding General Mills or generate 10.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 97.73% |
Values | Daily Returns |
Micron Technology vs. General Mills
Performance |
Timeline |
Micron Technology |
General Mills |
Micron Technology and General Mills Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and General Mills
The main advantage of trading using opposite Micron Technology and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.Micron Technology vs. Diodes Incorporated | Micron Technology vs. Daqo New Energy | Micron Technology vs. MagnaChip Semiconductor | Micron Technology vs. Nano Labs |
General Mills vs. Johnson Johnson | General Mills vs. AstraZeneca PLC | General Mills vs. Amgen Inc | General Mills vs. Bayer AG NA |
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 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..
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