Correlation Between Micron Technology and Columbia Integrated

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

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

Diversification Opportunities for Micron Technology and Columbia Integrated

-0.53

Correlation Coefficient

Micron Technology  Columbia Integrated

Excellent diversification

The 3 months correlation between Micron and Columbia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Columbia Integrated Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Integrated Small 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 Columbia Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Integrated Small has no effect on the direction of Micron Technology i.e., Micron Technology and Columbia Integrated go up and down completely randomly.

Pair Corralation between Micron Technology and Columbia Integrated

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Columbia Integrated. In addition to that, Micron Technology is 2.52 times more volatile than Columbia Integrated Small. It trades about -0.06 of its total potential returns per unit of risk. Columbia Integrated Small is currently generating about 0.21 per unit of volatility. If you would invest  1,576  in Columbia Integrated Small on September 30, 2024 and sell it today you would earn a total of  192.00  from holding Columbia Integrated Small or generate 12.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	65.63%
Values	Daily Returns

Micron Technology  vs.  Columbia Integrated Small

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.

Columbia Integrated Small

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Columbia Integrated Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak essential indicators, Columbia Integrated showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Columbia Integrated

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

The idea behind Micron Technology and Columbia Integrated Small 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.