Correlation Between Micron Technology, and Enduro Metals

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

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

Diversification Opportunities for Micron Technology, and Enduro Metals

0.52

Correlation Coefficient

Micron Technology,  Enduro Metals

Very weak diversification

The 3 months correlation between Micron and Enduro is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology, and Enduro Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals Corp 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 Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals Corp has no effect on the direction of Micron Technology, i.e., Micron Technology, and Enduro Metals go up and down completely randomly.

Pair Corralation between Micron Technology, and Enduro Metals

Assuming the 90 days trading horizon Micron Technology, is expected to generate 0.66 times more return on investment than Enduro Metals. However, Micron Technology, is 1.51 times less risky than Enduro Metals. It trades about 0.07 of its potential returns per unit of risk. Enduro Metals Corp is currently generating about -0.04 per unit of risk. If you would invest  2,028  in Micron Technology, on October 10, 2024 and sell it today you would earn a total of  315.00  from holding Micron Technology, or generate 15.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	15.38%
Values	Daily Returns

Micron Technology,  vs.  Enduro Metals Corp

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 very healthy basic indicators, Micron Technology, is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Enduro Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enduro Metals Corp 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 fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Micron Technology, and Enduro Metals

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

The idea behind Micron Technology, and Enduro Metals Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .