Correlation Between Ross Stores and Entegris

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

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

Diversification Opportunities for Ross Stores and Entegris

0.41

Correlation Coefficient

Ross Stores  Entegris

Very weak diversification

The 3 months correlation between Ross and Entegris is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Ross Stores 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 Ross Stores 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 Ross Stores i.e., Ross Stores and Entegris go up and down completely randomly.

Pair Corralation between Ross Stores and Entegris

Given the investment horizon of 90 days Ross Stores is expected to generate 0.55 times more return on investment than Entegris. However, Ross Stores is 1.81 times less risky than Entegris. It trades about 0.0 of its potential returns per unit of risk. Entegris is currently generating about -0.06 per unit of risk. 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

Ross Stores  vs.  Entegris

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.

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 Ross Stores and Entegris

The main advantage of trading using opposite Ross Stores and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores 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 Ross Stores 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.