Correlation Between Micron Technology and KraneShares Asia
Can any of the company-specific risk be diversified away by investing in both Micron Technology and KraneShares Asia 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 KraneShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and KraneShares Asia Pacific, you can compare the effects of market volatilities on Micron Technology and KraneShares Asia 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 KraneShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and KraneShares Asia.
Diversification Opportunities for Micron Technology and KraneShares Asia
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Micron and KraneShares is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and KraneShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Asia Pacific 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 KraneShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Asia Pacific has no effect on the direction of Micron Technology i.e., Micron Technology and KraneShares Asia go up and down completely randomly.
Pair Corralation between Micron Technology and KraneShares Asia
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the KraneShares Asia. In addition to that, Micron Technology is 14.83 times more volatile than KraneShares Asia Pacific. It trades about -0.03 of its total potential returns per unit of risk. KraneShares Asia Pacific is currently generating about 0.03 per unit of volatility. If you would invest 2,411 in KraneShares Asia Pacific on December 6, 2024 and sell it today you would earn a total of 12.50 from holding KraneShares Asia Pacific or generate 0.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Micron Technology vs. KraneShares Asia Pacific
Performance |
Timeline |
Micron Technology |
KraneShares Asia Pacific |
Micron Technology and KraneShares Asia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and KraneShares Asia
The main advantage of trading using opposite Micron Technology and KraneShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, KraneShares Asia 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 KraneShares Asia will offset losses from the drop in KraneShares Asia'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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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