Correlation Between GSI Technology and Entegris

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

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

Diversification Opportunities for GSI Technology and Entegris

0.11

Correlation Coefficient

GSI Technology  Entegris

Average diversification

The 3 months correlation between GSI and Entegris is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GSI Technology and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and GSI Technology 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 GSI Technology 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 GSI Technology i.e., GSI Technology and Entegris go up and down completely randomly.

Pair Corralation between GSI Technology and Entegris

Given the investment horizon of 90 days GSI Technology is expected to generate 2.0 times more return on investment than Entegris. However, GSI Technology is 2.0 times more volatile than Entegris. It trades about 0.01 of its potential returns per unit of risk. Entegris is currently generating about -0.07 per unit of risk. If you would invest  288.00  in GSI Technology on September 21, 2024 and sell it today you would lose (15.00) from holding GSI Technology or give up 5.21% of portfolio value over 90 days.

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

GSI Technology  vs.  Entegris

GSI Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 GSI Technology and Entegris

The main advantage of trading using opposite GSI Technology and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSI Technology 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 GSI Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.