Correlation Between Entegris and Hillman Solutions

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

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

Diversification Opportunities for Entegris and Hillman Solutions

0.68

Correlation Coefficient

Entegris  Hillman Solutions

Poor diversification

The 3 months correlation between Entegris and Hillman is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Hillman Solutions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillman Solutions Corp 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 Hillman Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillman Solutions Corp has no effect on the direction of Entegris i.e., Entegris and Hillman Solutions go up and down completely randomly.

Pair Corralation between Entegris and Hillman Solutions

Given the investment horizon of 90 days Entegris is expected to generate 1.36 times more return on investment than Hillman Solutions. However, Entegris is 1.36 times more volatile than Hillman Solutions Corp. It trades about 0.02 of its potential returns per unit of risk. Hillman Solutions Corp is currently generating about -0.08 per unit of risk. If you would invest  9,936  in Entegris on December 20, 2024 and sell it today you would earn a total of  101.00  from holding Entegris or generate 1.02% return on investment over 90 days.

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

Entegris  vs.  Hillman Solutions Corp

Entegris

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entegris are ranked lower than 1 (%) 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.

Hillman Solutions Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hillman Solutions Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary 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 Hillman Solutions

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

The idea behind Entegris and Hillman Solutions Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.