Correlation Between Micron Technology and Satrix Indi

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

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

Diversification Opportunities for Micron Technology and Satrix Indi

-0.06

Correlation Coefficient

Micron Technology  Satrix Indi

Good diversification

The 3 months correlation between Micron and Satrix is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Satrix Indi ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satrix Indi ETF 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 Satrix Indi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satrix Indi ETF has no effect on the direction of Micron Technology i.e., Micron Technology and Satrix Indi go up and down completely randomly.

Pair Corralation between Micron Technology and Satrix Indi

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 4.13 times more return on investment than Satrix Indi. However, Micron Technology is 4.13 times more volatile than Satrix Indi ETF. It trades about 0.05 of its potential returns per unit of risk. Satrix Indi ETF is currently generating about 0.08 per unit of risk. If you would invest  8,531  in Micron Technology on December 29, 2024 and sell it today you would earn a total of  585.00  from holding Micron Technology or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Micron Technology  vs.  Satrix Indi ETF

Micron Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Satrix Indi ETF

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Satrix Indi ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Satrix Indi 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 Satrix Indi

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

The idea behind Micron Technology and Satrix Indi ETF 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.