Correlation Between Independence Realty and Entegris

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

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

Diversification Opportunities for Independence Realty and Entegris

-0.04

Correlation Coefficient

Independence Realty  Entegris

Good diversification

The 3 months correlation between Independence and Entegris is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Independence Realty Trust and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Independence Realty 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 Independence Realty Trust 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 Independence Realty i.e., Independence Realty and Entegris go up and down completely randomly.

Pair Corralation between Independence Realty and Entegris

Considering the 90-day investment horizon Independence Realty Trust is expected to generate 0.53 times more return on investment than Entegris. However, Independence Realty Trust is 1.88 times less risky than Entegris. It trades about 0.05 of its potential returns per unit of risk. Entegris is currently generating about -0.01 per unit of risk. If you would invest  1,986  in Independence Realty Trust on September 27, 2024 and sell it today you would earn a total of  46.00  from holding Independence Realty Trust or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Independence Realty Trust  vs.  Entegris

Independence Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Independence Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Independence Realty is not utilizing all of its potentials. The newest 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 Independence Realty and Entegris

The main advantage of trading using opposite Independence Realty and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Realty 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 Independence Realty Trust 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.