Correlation Between Micron Technology and AdvisorShares Pure

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

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

Diversification Opportunities for Micron Technology and AdvisorShares Pure

0.56

Correlation Coefficient

Micron Technology  AdvisorShares Pure

Very weak diversification

The 3 months correlation between Micron and AdvisorShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure 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 AdvisorShares Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of Micron Technology i.e., Micron Technology and AdvisorShares Pure go up and down completely randomly.

Pair Corralation between Micron Technology and AdvisorShares Pure

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the AdvisorShares Pure. In addition to that, Micron Technology is 2.01 times more volatile than AdvisorShares Pure Cannabis. It trades about -0.12 of its total potential returns per unit of risk. AdvisorShares Pure Cannabis is currently generating about 0.01 per unit of volatility. If you would invest  259.00  in AdvisorShares Pure Cannabis on October 8, 2024 and sell it today you would earn a total of  0.00  from holding AdvisorShares Pure Cannabis or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Micron Technology  vs.  AdvisorShares Pure Cannabis

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 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.

AdvisorShares Pure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdvisorShares Pure Cannabis 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 Etf's essential indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Micron Technology and AdvisorShares Pure

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

The idea behind Micron Technology and AdvisorShares Pure Cannabis 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.