Correlation Between Entegris and Fastighets

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

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

Diversification Opportunities for Entegris and Fastighets

0.2

Correlation Coefficient

Entegris  Fastighets

Modest diversification

The 3 months correlation between Entegris and Fastighets is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Fastighets AB Balder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastighets AB Balder 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 Fastighets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastighets AB Balder has no effect on the direction of Entegris i.e., Entegris and Fastighets go up and down completely randomly.

Pair Corralation between Entegris and Fastighets

Given the investment horizon of 90 days Entegris is expected to generate 1.04 times more return on investment than Fastighets. However, Entegris is 1.04 times more volatile than Fastighets AB Balder. It trades about -0.06 of its potential returns per unit of risk. Fastighets AB Balder is currently generating about -0.12 per unit of risk. If you would invest  11,475  in Entegris on September 27, 2024 and sell it today you would lose (1,193) from holding Entegris or give up 10.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Entegris  vs.  Fastighets AB Balder

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.

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.

Pair Trading with Entegris and Fastighets

The main advantage of trading using opposite Entegris and Fastighets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris position performs unexpectedly, Fastighets 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 Fastighets will offset losses from the drop in Fastighets' long position.

The idea behind Entegris and Fastighets AB Balder 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.