Correlation Between Indie Semiconductor and Entegris

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

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

Diversification Opportunities for Indie Semiconductor and Entegris

-0.11

Correlation Coefficient

Indie Semiconductor  Entegris

Good diversification

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

Pair Corralation between Indie Semiconductor and Entegris

Given the investment horizon of 90 days indie Semiconductor is expected to under-perform the Entegris. In addition to that, Indie Semiconductor is 2.42 times more volatile than Entegris. It trades about -0.04 of its total potential returns per unit of risk. Entegris is currently generating about 0.01 per unit of volatility. If you would invest  9,996  in Entegris on September 21, 2024 and sell it today you would lose (50.00) from holding Entegris or give up 0.5% of portfolio value over 90 days.

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

indie Semiconductor  vs.  Entegris

indie Semiconductor

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in indie Semiconductor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental indicators, Indie Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 Indie Semiconductor and Entegris

The main advantage of trading using opposite Indie Semiconductor and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indie Semiconductor 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 indie Semiconductor 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.