Correlation Between Micron Technology and Xp Properties

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

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

Diversification Opportunities for Micron Technology and Xp Properties

-0.13

Correlation Coefficient

Micron Technology  Xp Properties

Good diversification

The 3 months correlation between Micron and XPPR11 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Xp Properties Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Properties Fundo 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 Xp Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Properties Fundo has no effect on the direction of Micron Technology i.e., Micron Technology and Xp Properties go up and down completely randomly.

Pair Corralation between Micron Technology and Xp Properties

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Xp Properties. In addition to that, Micron Technology is 5.55 times more volatile than Xp Properties Fundo. It trades about -0.09 of its total potential returns per unit of risk. Xp Properties Fundo is currently generating about 0.09 per unit of volatility. If you would invest  1,281  in Xp Properties Fundo on December 28, 2024 and sell it today you would earn a total of  16.00  from holding Xp Properties Fundo or generate 1.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.96%
Values	Daily Returns

Micron Technology  vs.  Xp Properties Fundo

Micron Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 2 (%) 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.

Xp Properties Fundo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xp Properties Fundo has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Xp Properties 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 Xp Properties

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

The idea behind Micron Technology and Xp Properties Fundo 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.