Correlation Between Micron Technology and Shaniv

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

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

Diversification Opportunities for Micron Technology and Shaniv

-0.47

Correlation Coefficient

Micron Technology  Shaniv

Very good diversification

The 3 months correlation between Micron and Shaniv is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Shaniv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaniv 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 Shaniv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaniv has no effect on the direction of Micron Technology i.e., Micron Technology and Shaniv go up and down completely randomly.

Pair Corralation between Micron Technology and Shaniv

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Shaniv. In addition to that, Micron Technology is 1.81 times more volatile than Shaniv. It trades about -0.06 of its total potential returns per unit of risk. Shaniv is currently generating about 0.24 per unit of volatility. If you would invest  34,183  in Shaniv on September 30, 2024 and sell it today you would earn a total of  7,587  from holding Shaniv or generate 22.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.44%
Values	Daily Returns

Micron Technology  vs.  Shaniv

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.

Shaniv

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shaniv are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shaniv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Shaniv

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

The idea behind Micron Technology and Shaniv 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.