Correlation Between Micron Technology and ZKB Platinum

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

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

Diversification Opportunities for Micron Technology and ZKB Platinum

0.48

Correlation Coefficient

Micron Technology  ZKB Platinum

Very weak diversification

The 3 months correlation between Micron and ZKB is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ZKB Platinum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Platinum ETF 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 ZKB Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Platinum ETF has no effect on the direction of Micron Technology i.e., Micron Technology and ZKB Platinum go up and down completely randomly.

Pair Corralation between Micron Technology and ZKB Platinum

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the ZKB Platinum. In addition to that, Micron Technology is 3.99 times more volatile than ZKB Platinum ETF. It trades about -0.08 of its total potential returns per unit of risk. ZKB Platinum ETF is currently generating about -0.06 per unit of volatility. If you would invest  24,550  in ZKB Platinum ETF on September 30, 2024 and sell it today you would lose (345.00) from holding ZKB Platinum ETF or give up 1.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Micron Technology  vs.  ZKB Platinum ETF

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.

ZKB Platinum ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZKB Platinum ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ZKB Platinum is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Micron Technology and ZKB Platinum

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

The idea behind Micron Technology and ZKB Platinum ETF 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.