Correlation Between Micron Technology and ENEOS Holdings

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

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

Diversification Opportunities for Micron Technology and ENEOS Holdings

-0.26

Correlation Coefficient

Micron Technology  ENEOS Holdings

Very good diversification

The 3 months correlation between Micron and ENEOS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS Holdings 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 ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Micron Technology i.e., Micron Technology and ENEOS Holdings go up and down completely randomly.

Pair Corralation between Micron Technology and ENEOS Holdings

Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the ENEOS Holdings. In addition to that, Micron Technology is 1.34 times more volatile than ENEOS Holdings. It trades about -0.07 of its total potential returns per unit of risk. ENEOS Holdings is currently generating about 0.03 per unit of volatility. If you would invest  470.00  in ENEOS Holdings on September 14, 2024 and sell it today you would earn a total of  28.00  from holding ENEOS Holdings or generate 5.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Micron Technology  vs.  ENEOS Holdings

Micron Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Micron Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

ENEOS Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ENEOS Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ENEOS Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Micron Technology and ENEOS Holdings

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

The idea behind Micron Technology and ENEOS Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.