Correlation Between GEN Restaurant and Micron Technology

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

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

Diversification Opportunities for GEN Restaurant and Micron Technology

0.21

Correlation Coefficient

GEN Restaurant  Micron Technology

Modest diversification

The 3 months correlation between GEN and Micron is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and Micron Technology go up and down completely randomly.

Pair Corralation between GEN Restaurant and Micron Technology

Given the investment horizon of 90 days GEN Restaurant Group, is expected to under-perform the Micron Technology. In addition to that, GEN Restaurant is 1.0 times more volatile than Micron Technology. It trades about -0.06 of its total potential returns per unit of risk. Micron Technology is currently generating about 0.0 per unit of volatility. If you would invest  10,846  in Micron Technology on December 17, 2024 and sell it today you would lose (767.00) from holding Micron Technology or give up 7.07% of portfolio value over 90 days.

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

GEN Restaurant Group,  vs.  Micron Technology

GEN Restaurant Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Micron Technology

Risk-Adjusted Performance

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 comparatively stable basic indicators, Micron Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GEN Restaurant and Micron Technology

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

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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.