Correlation Between Micron Technology and UOB Kay
Can any of the company-specific risk be diversified away by investing in both Micron Technology and UOB Kay 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 UOB Kay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and UOB Kay Hian, you can compare the effects of market volatilities on Micron Technology and UOB Kay 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 UOB Kay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and UOB Kay.
Diversification Opportunities for Micron Technology and UOB Kay
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micron and UOB is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and UOB Kay Hian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOB Kay Hian 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 UOB Kay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOB Kay Hian has no effect on the direction of Micron Technology i.e., Micron Technology and UOB Kay go up and down completely randomly.
Pair Corralation between Micron Technology and UOB Kay
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the UOB Kay. In addition to that, Micron Technology is 2.49 times more volatile than UOB Kay Hian. It trades about -0.14 of its total potential returns per unit of risk. UOB Kay Hian is currently generating about 0.01 per unit of volatility. If you would invest 530.00 in UOB Kay Hian on September 25, 2024 and sell it today you would earn a total of 0.00 from holding UOB Kay Hian or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.0% |
Values | Daily Returns |
Micron Technology vs. UOB Kay Hian
Performance |
Timeline |
Micron Technology |
UOB Kay Hian |
Micron Technology and UOB Kay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Micron Technology and UOB Kay
The main advantage of trading using opposite Micron Technology and UOB Kay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, UOB Kay 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 UOB Kay will offset losses from the drop in UOB Kay's long position.Micron Technology vs. Diodes Incorporated | Micron Technology vs. Nano Labs | Micron Technology vs. Enphase Energy |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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