Correlation Between Fastighets and Entegris

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

By analyzing existing cross correlation between Fastighets AB Balder and Entegris, you can compare the effects of market volatilities on Fastighets 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 Fastighets with a short position of Entegris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastighets and Entegris.

Diversification Opportunities for Fastighets and Entegris

0.2

Correlation Coefficient

Fastighets  Entegris

Modest diversification

The 3 months correlation between Fastighets and Entegris is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fastighets AB Balder and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Fastighets 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 Fastighets AB Balder 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 Fastighets i.e., Fastighets and Entegris go up and down completely randomly.

Pair Corralation between Fastighets and Entegris

Assuming the 90 days horizon Fastighets AB Balder is expected to generate 1.17 times more return on investment than Entegris. However, Fastighets is 1.17 times more volatile than Entegris. It trades about 0.06 of its potential returns per unit of risk. Entegris is currently generating about 0.04 per unit of risk. If you would invest  336.00  in Fastighets AB Balder on September 27, 2024 and sell it today you would earn a total of  314.00  from holding Fastighets AB Balder or generate 93.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Fastighets AB Balder  vs.  Entegris

Fastighets AB Balder

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fastighets AB Balder has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Entegris

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Fastighets and Entegris

The main advantage of trading using opposite Fastighets and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastighets 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.

The idea behind Fastighets AB Balder and Entegris 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.