Correlation Between Micron Technology and Timothy Plan

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

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

Diversification Opportunities for Micron Technology and Timothy Plan

0.09

Correlation Coefficient

Micron Technology  Timothy Plan

Significant diversification

The 3 months correlation between Micron and Timothy is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Timothy Plan High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan High 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 Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan High has no effect on the direction of Micron Technology i.e., Micron Technology and Timothy Plan go up and down completely randomly.

Pair Corralation between Micron Technology and Timothy Plan

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 24.99 times more return on investment than Timothy Plan. However, Micron Technology is 24.99 times more volatile than Timothy Plan High. It trades about 0.04 of its potential returns per unit of risk. Timothy Plan High is currently generating about 0.18 per unit of risk. If you would invest  8,992  in Micron Technology on December 4, 2024 and sell it today you would earn a total of  128.00  from holding Micron Technology or generate 1.42% 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.  Timothy Plan High

Micron Technology

Risk-Adjusted Performance

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.

Timothy Plan High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Plan High are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Timothy Plan 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 Timothy Plan

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

The idea behind Micron Technology and Timothy Plan High 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.