Correlation Between Micron Technology and Clearbridge International

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

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

Diversification Opportunities for Micron Technology and Clearbridge International

0.35

Correlation Coefficient

Micron Technology  Clearbridge International

Weak diversification

The 3 months correlation between Micron and Clearbridge is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Micron Technology i.e., Micron Technology and Clearbridge International go up and down completely randomly.

Pair Corralation between Micron Technology and Clearbridge International

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 3.85 times more return on investment than Clearbridge International. However, Micron Technology is 3.85 times more volatile than Clearbridge International Growth. It trades about 0.03 of its potential returns per unit of risk. Clearbridge International Growth is currently generating about 0.05 per unit of risk. If you would invest  8,210  in Micron Technology on September 27, 2024 and sell it today you would earn a total of  718.00  from holding Micron Technology or generate 8.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Micron Technology  vs.  Clearbridge International Grow

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Clearbridge International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearbridge International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Micron Technology and Clearbridge International

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

The idea behind Micron Technology and Clearbridge International Growth 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..