Correlation Between Acco Brands and Entegris

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

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

Diversification Opportunities for Acco Brands and Entegris

0.41

Correlation Coefficient

Acco Brands  Entegris

Very weak diversification

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

Pair Corralation between Acco Brands and Entegris

Given the investment horizon of 90 days Acco Brands is expected to generate 12.32 times less return on investment than Entegris. But when comparing it to its historical volatility, Acco Brands is 1.14 times less risky than Entegris. It trades about 0.0 of its potential returns per unit of risk. Entegris is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,450  in Entegris on October 23, 2024 and sell it today you would earn a total of  2,188  from holding Entegris or generate 25.89% return on investment over 90 days.

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

Acco Brands  vs.  Entegris

Acco Brands

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acco Brands are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Acco Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Entegris

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entegris are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Acco Brands and Entegris

The main advantage of trading using opposite Acco Brands and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands 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 Acco Brands 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.