Correlation Between Xtract One and Micron Technology,

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

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

Diversification Opportunities for Xtract One and Micron Technology,

0.45

Correlation Coefficient

Xtract One  Micron Technology,

Very weak diversification

The 3 months correlation between Xtract and Micron is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One Technologies and Micron Technology, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology, and Xtract One 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 Xtract One Technologies are associated (or correlated) with Micron Technology,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology, has no effect on the direction of Xtract One i.e., Xtract One and Micron Technology, go up and down completely randomly.

Pair Corralation between Xtract One and Micron Technology,

Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Micron Technology,. In addition to that, Xtract One is 1.34 times more volatile than Micron Technology,. It trades about -0.07 of its total potential returns per unit of risk. Micron Technology, is currently generating about 0.02 per unit of volatility. If you would invest  2,493  in Micron Technology, on October 25, 2024 and sell it today you would earn a total of  7.00  from holding Micron Technology, or generate 0.28% return on investment over 90 days.

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

Xtract One Technologies  vs.  Micron Technology,

Xtract One Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtract One Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic 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 firm investors.

Micron Technology,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Micron Technology, is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Xtract One and Micron Technology,

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

The idea behind Xtract One Technologies and Micron Technology, 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.