Correlation Between Micron Technology and Ares Acquisition
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Ares Acquisition 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 Ares Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Ares Acquisition, you can compare the effects of market volatilities on Micron Technology and Ares Acquisition 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 Ares Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Ares Acquisition.
Diversification Opportunities for Micron Technology and Ares Acquisition
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Micron and Ares is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Ares Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Acquisition 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 Ares Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Acquisition has no effect on the direction of Micron Technology i.e., Micron Technology and Ares Acquisition go up and down completely randomly.
Pair Corralation between Micron Technology and Ares Acquisition
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 6.98 times more return on investment than Ares Acquisition. However, Micron Technology is 6.98 times more volatile than Ares Acquisition. It trades about 0.12 of its potential returns per unit of risk. Ares Acquisition is currently generating about 0.01 per unit of risk. If you would invest 8,725 in Micron Technology on September 18, 2024 and sell it today you would earn a total of 2,135 from holding Micron Technology or generate 24.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Micron Technology vs. Ares Acquisition
Performance |
Timeline |
Micron Technology |
Ares Acquisition |
Micron Technology and Ares Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and Ares Acquisition
The main advantage of trading using opposite Micron Technology and Ares Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Ares Acquisition 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 Ares Acquisition will offset losses from the drop in Ares Acquisition's long position.Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
Ares Acquisition vs. Voyager Acquisition Corp | Ares Acquisition vs. YHN Acquisition I | Ares Acquisition vs. YHN Acquisition I | Ares Acquisition vs. CO2 Energy Transition |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |