Correlation Between Micron Technology and MPhase Technologies

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

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

Diversification Opportunities for Micron Technology and MPhase Technologies

-0.08

Correlation Coefficient

Micron Technology  MPhase Technologies

Good diversification

The 3 months correlation between Micron and MPhase is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and mPhase Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mPhase Technologies 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 MPhase Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mPhase Technologies has no effect on the direction of Micron Technology i.e., Micron Technology and MPhase Technologies go up and down completely randomly.

Pair Corralation between Micron Technology and MPhase Technologies

If you would invest  0.01  in mPhase Technologies on December 4, 2024 and sell it today you would earn a total of  0.00  from holding mPhase Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Micron Technology  vs.  mPhase Technologies

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.

mPhase Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in mPhase Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, MPhase Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and MPhase Technologies

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

The idea behind Micron Technology and mPhase Technologies 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.