Correlation Between Micron Technology and Semper Short

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

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

Diversification Opportunities for Micron Technology and Semper Short

-0.5

Correlation Coefficient

Micron Technology  Semper Short

Very good diversification

The 3 months correlation between Micron and Semper is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Semper Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semper Short Duration 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 Semper Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semper Short Duration has no effect on the direction of Micron Technology i.e., Micron Technology and Semper Short go up and down completely randomly.

Pair Corralation between Micron Technology and Semper Short

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Semper Short. In addition to that, Micron Technology is 29.58 times more volatile than Semper Short Duration. It trades about -0.07 of its total potential returns per unit of risk. Semper Short Duration is currently generating about 0.22 per unit of volatility. If you would invest  918.00  in Semper Short Duration on September 30, 2024 and sell it today you would earn a total of  32.00  from holding Semper Short Duration or generate 3.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Micron Technology  vs.  Semper Short Duration

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.

Semper Short Duration

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semper Short Duration are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Semper Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Micron Technology and Semper Short

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

The idea behind Micron Technology and Semper Short Duration 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.