Correlation Between Cadence Design and Entegris
Can any of the company-specific risk be diversified away by investing in both Cadence Design 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 Cadence Design and Entegris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadence Design Systems and Entegris, you can compare the effects of market volatilities on Cadence Design 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 Cadence Design with a short position of Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and Entegris.
Diversification Opportunities for Cadence Design and Entegris
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cadence and Entegris is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Cadence Design 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 Cadence Design Systems 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 Cadence Design i.e., Cadence Design and Entegris go up and down completely randomly.
Pair Corralation between Cadence Design and Entegris
Given the investment horizon of 90 days Cadence Design Systems is expected to generate 0.71 times more return on investment than Entegris. However, Cadence Design Systems is 1.4 times less risky than Entegris. It trades about 0.07 of its potential returns per unit of risk. Entegris is currently generating about 0.04 per unit of risk. If you would invest 16,823 in Cadence Design Systems on September 3, 2024 and sell it today you would earn a total of 13,858 from holding Cadence Design Systems or generate 82.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadence Design Systems vs. Entegris
Performance |
| Timeline |
| Cadence Design Systems |
| Entegris |
Cadence Design and Entegris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadence Design and Entegris
The main advantage of trading using opposite Cadence Design and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Design 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.| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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