Correlation Between Micron Technology and Amazon

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

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

Diversification Opportunities for Micron Technology and Amazon

0.86

Correlation Coefficient

Micron Technology  Amazon

Very poor diversification

The 3 months correlation between Micron and Amazon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Micron Technology i.e., Micron Technology and Amazon go up and down completely randomly.

Pair Corralation between Micron Technology and Amazon

Assuming the 90 days trading horizon Micron Technology is expected to generate 1.33 times more return on investment than Amazon. However, Micron Technology is 1.33 times more volatile than Amazon Inc. It trades about 0.26 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.16 per unit of risk. If you would invest  7,289  in Micron Technology on April 24, 2025 and sell it today you would earn a total of  3,256  from holding Micron Technology or generate 44.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Micron Technology  vs.  Amazon Inc

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.

Amazon Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amazon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Amazon

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

The idea behind Micron Technology and Amazon Inc 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.