Correlation Between Entegris and Ross Stores

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

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

Diversification Opportunities for Entegris and Ross Stores

0.41

Correlation Coefficient

Entegris  Ross Stores

Very weak diversification

The 3 months correlation between Entegris and Ross is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Entegris i.e., Entegris and Ross Stores go up and down completely randomly.

Pair Corralation between Entegris and Ross Stores

Given the investment horizon of 90 days Entegris is expected to under-perform the Ross Stores. In addition to that, Entegris is 1.81 times more volatile than Ross Stores. It trades about -0.06 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.0 per unit of volatility. If you would invest  14,963  in Ross Stores on September 21, 2024 and sell it today you would lose (48.00) from holding Ross Stores or give up 0.32% of portfolio value over 90 days.

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

Entegris  vs.  Ross Stores

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.

Ross Stores

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ross Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ross Stores is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Entegris and Ross Stores

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

The idea behind Entegris and Ross Stores 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.