Correlation Between Micron Technology and Smart Gunes

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

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

Diversification Opportunities for Micron Technology and Smart Gunes

-0.42

Correlation Coefficient

Micron Technology  Smart Gunes

Very good diversification

The 3 months correlation between Micron and Smart is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Smart Gunes Enerjisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Gunes Enerjisi 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 Smart Gunes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Gunes Enerjisi has no effect on the direction of Micron Technology i.e., Micron Technology and Smart Gunes go up and down completely randomly.

Pair Corralation between Micron Technology and Smart Gunes

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Smart Gunes. In addition to that, Micron Technology is 2.31 times more volatile than Smart Gunes Enerjisi. It trades about -0.11 of its total potential returns per unit of risk. Smart Gunes Enerjisi is currently generating about 0.12 per unit of volatility. If you would invest  3,814  in Smart Gunes Enerjisi on September 23, 2024 and sell it today you would earn a total of  186.00  from holding Smart Gunes Enerjisi or generate 4.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Micron Technology  vs.  Smart Gunes Enerjisi

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 comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Smart Gunes Enerjisi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart Gunes Enerjisi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Smart Gunes is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Micron Technology and Smart Gunes

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

The idea behind Micron Technology and Smart Gunes Enerjisi 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.