Correlation Between Entegris and Nova
Can any of the company-specific risk be diversified away by investing in both Entegris and Nova 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 Nova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entegris and Nova, you can compare the effects of market volatilities on Entegris and Nova 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 Nova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entegris and Nova.
Diversification Opportunities for Entegris and Nova
Very poor diversification
The 3 months correlation between Entegris and Nova is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Entegris i.e., Entegris and Nova go up and down completely randomly.
Pair Corralation between Entegris and Nova
Given the investment horizon of 90 days Entegris is expected to generate 0.7 times more return on investment than Nova. However, Entegris is 1.43 times less risky than Nova. It trades about 0.05 of its potential returns per unit of risk. Nova is currently generating about -0.07 per unit of risk. If you would invest 10,585 in Entegris on August 28, 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entegris vs. Nova
Performance |
| Timeline |
| Entegris |
| Nova |
Entegris and Nova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entegris and Nova
The main advantage of trading using opposite Entegris and Nova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris position performs unexpectedly, Nova 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 Nova will offset losses from the drop in Nova's long position.| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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