Correlation Between Entegris and BranchOut Food

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

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

Diversification Opportunities for Entegris and BranchOut Food

0.01

Correlation Coefficient

Entegris  BranchOut Food

Significant diversification

The 3 months correlation between Entegris and BranchOut is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and BranchOut Food Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BranchOut Food Common and Entegris 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 Entegris are associated (or correlated) with BranchOut Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BranchOut Food Common has no effect on the direction of Entegris i.e., Entegris and BranchOut Food go up and down completely randomly.

Pair Corralation between Entegris and BranchOut Food

Given the investment horizon of 90 days Entegris is expected to generate 38.17 times less return on investment than BranchOut Food. But when comparing it to its historical volatility, Entegris is 5.43 times less risky than BranchOut Food. It trades about 0.01 of its potential returns per unit of risk. BranchOut Food Common is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  139.00  in BranchOut Food Common on September 27, 2024 and sell it today you would earn a total of  25.00  from holding BranchOut Food Common or generate 17.99% return on investment over 90 days.

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

Entegris  vs.  BranchOut Food Common

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.

BranchOut Food Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BranchOut Food Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BranchOut Food is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Entegris and BranchOut Food

The main advantage of trading using opposite Entegris and BranchOut Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris position performs unexpectedly, BranchOut Food 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 BranchOut Food will offset losses from the drop in BranchOut Food's long position.

The idea behind Entegris and BranchOut Food Common 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.