Correlation Between Micron Technology and Midas Fund

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

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

Diversification Opportunities for Micron Technology and Midas Fund

0.17

Correlation Coefficient

Micron Technology  Midas Fund

Average diversification

The 3 months correlation between Micron and Midas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Midas Fund Midas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midas Fund Midas 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 Midas Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midas Fund Midas has no effect on the direction of Micron Technology i.e., Micron Technology and Midas Fund go up and down completely randomly.

Pair Corralation between Micron Technology and Midas Fund

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.48 times less return on investment than Midas Fund. In addition to that, Micron Technology is 2.48 times more volatile than Midas Fund Midas. It trades about 0.05 of its total potential returns per unit of risk. Midas Fund Midas is currently generating about 0.32 per unit of volatility. If you would invest  119.00  in Midas Fund Midas on December 25, 2024 and sell it today you would earn a total of  42.00  from holding Midas Fund Midas or generate 35.29% 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.  Midas Fund Midas

Micron Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Midas Fund Midas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Midas Fund Midas are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midas Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Midas Fund

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

The idea behind Micron Technology and Midas Fund Midas 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.