Correlation Between Micron Technology and Doubledown Interactive

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

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

Diversification Opportunities for Micron Technology and Doubledown Interactive

0.4

Correlation Coefficient

Micron Technology  Doubledown Interactive

Very weak diversification

The 3 months correlation between Micron and Doubledown is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Doubledown Interactive Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubledown Interactive 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 Doubledown Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubledown Interactive has no effect on the direction of Micron Technology i.e., Micron Technology and Doubledown Interactive go up and down completely randomly.

Pair Corralation between Micron Technology and Doubledown Interactive

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.29 times more return on investment than Doubledown Interactive. However, Micron Technology is 1.29 times more volatile than Doubledown Interactive Co. It trades about -0.13 of its potential returns per unit of risk. Doubledown Interactive Co is currently generating about -0.35 per unit of risk. If you would invest  10,448  in Micron Technology on September 26, 2024 and sell it today you would lose (1,476) from holding Micron Technology or give up 14.13% of portfolio value over 90 days.

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

Micron Technology  vs.  Doubledown Interactive Co

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.

Doubledown Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubledown Interactive Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Micron Technology and Doubledown Interactive

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

The idea behind Micron Technology and Doubledown Interactive Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.