Correlation Between Advanced Micro and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Micron Technology 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 Advanced Micro and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Micron Technology, you can compare the effects of market volatilities on Advanced Micro and Micron Technology 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 Advanced Micro with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Micron Technology.
Diversification Opportunities for Advanced Micro and Micron Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Micron is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Advanced Micro i.e., Advanced Micro and Micron Technology go up and down completely randomly.
Pair Corralation between Advanced Micro and Micron Technology
Considering the 90-day investment horizon Advanced Micro is expected to generate 1.28 times less return on investment than Micron Technology. In addition to that, Advanced Micro is 1.28 times more volatile than Micron Technology. It trades about 0.07 of its total potential returns per unit of risk. Micron Technology is currently generating about 0.11 per unit of volatility. If you would invest 6,614 in Micron Technology on January 19, 2024 and sell it today you would earn a total of 4,579 from holding Micron Technology or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Micron Technology
Performance |
| Timeline |
| Advanced Micro Devices |
| Micron Technology |
Advanced Micro and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Micron Technology
The main advantage of trading using opposite Advanced Micro and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |