Correlation Between Entegris and FormFactor

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

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

Diversification Opportunities for Entegris and FormFactor

0.33

Correlation Coefficient

Entegris  FormFactor

Weak diversification

The 3 months correlation between Entegris and FormFactor is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor 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 FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of Entegris i.e., Entegris and FormFactor go up and down completely randomly.

Pair Corralation between Entegris and FormFactor

Given the investment horizon of 90 days Entegris is expected to generate 0.84 times more return on investment than FormFactor. However, Entegris is 1.18 times less risky than FormFactor. It trades about -0.04 of its potential returns per unit of risk. FormFactor is currently generating about -0.22 per unit of risk. If you would invest  9,944  in Entegris on December 28, 2024 and sell it today you would lose (690.00) from holding Entegris or give up 6.94% 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.  FormFactor

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

FormFactor

Risk-Adjusted Performance

Very Weak

Over the last 90 days FormFactor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Entegris and FormFactor

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

The idea behind Entegris and FormFactor 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.