Correlation Between Micron Technology and Entain Plc

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Can any of the company-specific risk be diversified away by investing in both Micron Technology and Entain Plc 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 Entain Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Entain Plc, you can compare the effects of market volatilities on Micron Technology and Entain Plc 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 Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Entain Plc.

Diversification Opportunities for Micron Technology and Entain Plc

MicronEntainDiversified AwayMicronEntainDiversified Away100%
0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Micron and Entain is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc 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 Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of Micron Technology i.e., Micron Technology and Entain Plc go up and down completely randomly.

Pair Corralation between Micron Technology and Entain Plc

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Entain Plc. But the stock apears to be less risky and, when comparing its historical volatility, Micron Technology is 1.04 times less risky than Entain Plc. The stock trades about -0.07 of its potential returns per unit of risk. The Entain Plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  808.00  in Entain Plc on September 26, 2024 and sell it today you would earn a total of  27.00  from holding Entain Plc or generate 3.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Micron Technology  vs.  Entain Plc

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-505101520
JavaScript chart by amCharts 3.21.15MU GMVHF
       Timeline  
Micron Technology 

Risk-Adjusted Performance

0 of 100

 
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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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec859095100105110115
Entain Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Entain Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8.599.51010.5

Micron Technology and Entain Plc Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.1-9.07-6.03-2.990.03.046.089.1212.15 0.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15MU GMVHF
       Returns  

Pair Trading with Micron Technology and Entain Plc

The main advantage of trading using opposite Micron Technology and Entain Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Entain Plc 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 Entain Plc will offset losses from the drop in Entain Plc's long position.
The idea behind Micron Technology and Entain Plc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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