Correlation Between Entegris and Bitcoin Depot

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

By analyzing existing cross correlation between Entegris and Bitcoin Depot, you can compare the effects of market volatilities on Entegris and Bitcoin Depot 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 Bitcoin Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entegris and Bitcoin Depot.

Diversification Opportunities for Entegris and Bitcoin Depot

0.25

Correlation Coefficient

Entegris  Bitcoin Depot

Modest diversification

The 3 months correlation between Entegris and Bitcoin is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Entegris i.e., Entegris and Bitcoin Depot go up and down completely randomly.

Pair Corralation between Entegris and Bitcoin Depot

Given the investment horizon of 90 days Entegris is expected to generate 0.65 times more return on investment than Bitcoin Depot. However, Entegris is 1.54 times less risky than Bitcoin Depot. It trades about -0.01 of its potential returns per unit of risk. Bitcoin Depot is currently generating about -0.04 per unit of risk. If you would invest  10,217  in Entegris on December 21, 2024 and sell it today you would lose (312.00) from holding Entegris or give up 3.05% of portfolio value over 90 days.

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

Entegris  vs.  Bitcoin Depot

Entegris

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Bitcoin Depot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Entegris and Bitcoin Depot

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

The idea behind Entegris and Bitcoin Depot 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.