Correlation Between Micron Technology and Jaguar Mining
Can any of the company-specific risk be diversified away by investing in both Micron Technology and Jaguar Mining 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 Jaguar Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Jaguar Mining, you can compare the effects of market volatilities on Micron Technology and Jaguar Mining 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 Jaguar Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Jaguar Mining.
Diversification Opportunities for Micron Technology and Jaguar Mining
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Micron and Jaguar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Jaguar Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Mining 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 Jaguar Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Mining has no effect on the direction of Micron Technology i.e., Micron Technology and Jaguar Mining go up and down completely randomly.
Pair Corralation between Micron Technology and Jaguar Mining
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 0.86 times more return on investment than Jaguar Mining. However, Micron Technology is 1.16 times less risky than Jaguar Mining. It trades about -0.01 of its potential returns per unit of risk. Jaguar Mining is currently generating about -0.29 per unit of risk. If you would invest 9,566 in Micron Technology on September 25, 2024 and sell it today you would lose (594.00) from holding Micron Technology or give up 6.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Micron Technology vs. Jaguar Mining
Performance |
Timeline |
Micron Technology |
Jaguar Mining |
Micron Technology and Jaguar Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and Jaguar Mining
The main advantage of trading using opposite Micron Technology and Jaguar Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Jaguar Mining 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 Jaguar Mining will offset losses from the drop in Jaguar Mining's long position.Micron Technology vs. Diodes Incorporated | Micron Technology vs. Nano Labs | Micron Technology vs. Impinj Inc | Micron Technology vs. Enphase Energy |
Jaguar Mining vs. Wallbridge Mining | Jaguar Mining vs. Dundee Precious Metals | Jaguar Mining vs. International Tower Hill | Jaguar Mining vs. Centerra Gold |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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