Correlation Between Micron Technology and Amundi SP

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

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

Diversification Opportunities for Micron Technology and Amundi SP

-0.64

Correlation Coefficient

Micron Technology  Amundi SP

Excellent diversification

The 3 months correlation between Micron and Amundi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Amundi SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SP Global 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 Amundi SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SP Global has no effect on the direction of Micron Technology i.e., Micron Technology and Amundi SP go up and down completely randomly.

Pair Corralation between Micron Technology and Amundi SP

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Amundi SP. In addition to that, Micron Technology is 3.69 times more volatile than Amundi SP Global. It trades about -0.15 of its total potential returns per unit of risk. Amundi SP Global is currently generating about 0.17 per unit of volatility. If you would invest  1,366  in Amundi SP Global on October 4, 2024 and sell it today you would earn a total of  50.00  from holding Amundi SP Global or generate 3.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

Micron Technology  vs.  Amundi SP Global

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Amundi SP Global

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi SP Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking indicators, Amundi SP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Amundi SP

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

The idea behind Micron Technology and Amundi SP Global 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..