Correlation Between Micron Technology and Mainstay New

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

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

Diversification Opportunities for Micron Technology and Mainstay New

0.11

Correlation Coefficient

Micron Technology  Mainstay New

Average diversification

The 3 months correlation between Micron and Mainstay is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Mainstay New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay New York 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 Mainstay New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay New York has no effect on the direction of Micron Technology i.e., Micron Technology and Mainstay New go up and down completely randomly.

Pair Corralation between Micron Technology and Mainstay New

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Mainstay New. In addition to that, Micron Technology is 13.75 times more volatile than Mainstay New York. It trades about -0.07 of its total potential returns per unit of risk. Mainstay New York is currently generating about 0.02 per unit of volatility. If you would invest  951.00  in Mainstay New York on September 29, 2024 and sell it today you would earn a total of  6.00  from holding Mainstay New York or generate 0.63% return on investment over 90 days.

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

Micron Technology  vs.  Mainstay New York

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.

Mainstay New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay New York has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mainstay New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Micron Technology and Mainstay New

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

The idea behind Micron Technology and Mainstay New York 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.