Correlation Between Micron Technology and LVMH CDR
Can any of the company-specific risk be diversified away by investing in both Micron Technology and LVMH CDR 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 LVMH CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and LVMH CDR, you can compare the effects of market volatilities on Micron Technology and LVMH CDR 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 LVMH CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and LVMH CDR.
Diversification Opportunities for Micron Technology and LVMH CDR
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micron and LVMH is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and LVMH CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH CDR 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 LVMH CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH CDR has no effect on the direction of Micron Technology i.e., Micron Technology and LVMH CDR go up and down completely randomly.
Pair Corralation between Micron Technology and LVMH CDR
Assuming the 90 days trading horizon Micron Technology is expected to generate 3.45 times more return on investment than LVMH CDR. However, Micron Technology is 3.45 times more volatile than LVMH CDR. It trades about 0.21 of its potential returns per unit of risk. LVMH CDR is currently generating about 0.22 per unit of risk. If you would invest 4,296 in Micron Technology on October 6, 2025 and sell it today you would earn a total of 2,740 from holding Micron Technology or generate 63.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. LVMH CDR
Performance |
| Timeline |
| Micron Technology |
| LVMH CDR |
Micron Technology and LVMH CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and LVMH CDR
The main advantage of trading using opposite Micron Technology and LVMH CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, LVMH CDR 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 LVMH CDR will offset losses from the drop in LVMH CDR's long position.| Micron Technology vs. 2028 Investment Grade | Micron Technology vs. Westshore Terminals Investment | Micron Technology vs. DGL Investments No1 | Micron Technology vs. Contagious Gaming |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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