Correlation Between Entegris and Dennys Corp

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

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

Diversification Opportunities for Entegris and Dennys Corp

-0.01

Correlation Coefficient

Entegris  Dennys Corp

Good diversification

The 3 months correlation between Entegris and Dennys is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp 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 Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Entegris i.e., Entegris and Dennys Corp go up and down completely randomly.

Pair Corralation between Entegris and Dennys Corp

Given the investment horizon of 90 days Entegris is expected to under-perform the Dennys Corp. But the stock apears to be less risky and, when comparing its historical volatility, Entegris is 1.58 times less risky than Dennys Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Dennys Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  652.00  in Dennys Corp on September 16, 2024 and sell it today you would lose (25.00) from holding Dennys Corp or give up 3.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Entegris  vs.  Dennys Corp

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 nearly stable basic indicators, Entegris is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Dennys Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dennys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dennys Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Entegris and Dennys Corp

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

The idea behind Entegris and Dennys Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.