Correlation Between Applied Materials and Entegris
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Entegris 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 Applied Materials and Entegris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Entegris, you can compare the effects of market volatilities on Applied Materials and Entegris 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 Applied Materials with a short position of Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Entegris.
Diversification Opportunities for Applied Materials and Entegris
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and Entegris is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Applied Materials 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 Applied Materials are associated (or correlated) with Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Applied Materials i.e., Applied Materials and Entegris go up and down completely randomly.
Pair Corralation between Applied Materials and Entegris
Given the investment horizon of 90 days Applied Materials is expected to under-perform the Entegris. In addition to that, Applied Materials is 1.02 times more volatile than Entegris. It trades about -0.08 of its total potential returns per unit of risk. Entegris is currently generating about 0.05 per unit of volatility. If you would invest 10,585 in Entegris on August 27, 2024 and sell it today you would earn a total of 217.00 from holding Entegris or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. Entegris
Performance |
| Timeline |
| Applied Materials |
| Entegris |
Applied Materials and Entegris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Entegris
The main advantage of trading using opposite Applied Materials and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Entegris 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 Entegris will offset losses from the drop in Entegris' long position.| Applied Materials vs. KLA Tencor | Applied Materials vs. ASML Holding NV | Applied Materials vs. Axcelis Technologies | Applied Materials vs. Teradyne |
| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |