Correlation Between Entegris and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both Entegris and Arm 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 Entegris and Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entegris and Arm Holdings plc, you can compare the effects of market volatilities on Entegris and Arm 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 Entegris with a short position of Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entegris and Arm Holdings.
Diversification Opportunities for Entegris and Arm Holdings
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Entegris and Arm is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc and Entegris 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 Entegris are associated (or correlated) with Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Entegris i.e., Entegris and Arm Holdings go up and down completely randomly.
Pair Corralation between Entegris and Arm Holdings
Given the investment horizon of 90 days Entegris is expected to generate 10.75 times less return on investment than Arm Holdings. But when comparing it to its historical volatility, Entegris is 2.18 times less risky than Arm Holdings. It trades about 0.02 of its potential returns per unit of risk. Arm Holdings plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,723 in Arm Holdings plc on September 3, 2024 and sell it today you would earn a total of 7,311 from holding Arm Holdings plc or generate 108.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entegris vs. Arm Holdings plc
Performance |
| Timeline |
| Entegris |
| Arm Holdings plc |
Entegris and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entegris and Arm Holdings
The main advantage of trading using opposite Entegris and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris position performs unexpectedly, Arm 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Entegris vs. Teradyne | Entegris vs. Ichor Holdings | Entegris vs. Amtech Systems | Entegris vs. Veeco Instruments |
| Arm Holdings vs. Viemed Healthcare | Arm Holdings vs. Kontoor Brands | Arm Holdings vs. Cumberland Pharmaceuticals | Arm Holdings vs. Tencent Music Entertainment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |