Correlation Between GX AI and Micron Technology

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

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

Diversification Opportunities for GX AI and Micron Technology

0.89

Correlation Coefficient

GX AI  Micron Technology

Very poor diversification

The 3 months correlation between BAIQ39 and Micron is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and GX AI 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 GX AI TECH 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 GX AI i.e., GX AI and Micron Technology go up and down completely randomly.

Pair Corralation between GX AI and Micron Technology

Assuming the 90 days trading horizon GX AI is expected to generate 1.46 times less return on investment than Micron Technology. But when comparing it to its historical volatility, GX AI TECH is 1.83 times less risky than Micron Technology. It trades about 0.08 of its potential returns per unit of risk. Micron Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,195  in Micron Technology on April 7, 2025 and sell it today you would earn a total of  5,626  from holding Micron Technology or generate 108.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	82.93%
Values	Daily Returns

GX AI TECH  vs.  Micron Technology

GX AI TECH

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GX AI TECH are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, GX AI sustained solid returns over the last few months and may actually be approaching a breakup point.

Micron Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Micron Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GX AI and Micron Technology

The main advantage of trading using opposite GX AI and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI 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.

The idea behind GX AI TECH and Micron Technology 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.