Correlation Between Entegris and FREEPORT

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

By analyzing existing cross correlation between Entegris and FREEPORT MCMORAN INC 4625, you can compare the effects of market volatilities on Entegris and FREEPORT 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 FREEPORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entegris and FREEPORT.

Diversification Opportunities for Entegris and FREEPORT

0.32

Correlation Coefficient

Entegris  FREEPORT

Weak diversification

The 3 months correlation between Entegris and FREEPORT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and FREEPORT MCMORAN INC 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREEPORT MCMORAN INC 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 FREEPORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREEPORT MCMORAN INC has no effect on the direction of Entegris i.e., Entegris and FREEPORT go up and down completely randomly.

Pair Corralation between Entegris and FREEPORT

Given the investment horizon of 90 days Entegris is expected to under-perform the FREEPORT. In addition to that, Entegris is 2.79 times more volatile than FREEPORT MCMORAN INC 4625. It trades about -0.06 of its total potential returns per unit of risk. FREEPORT MCMORAN INC 4625 is currently generating about -0.06 per unit of volatility. If you would invest  9,969  in FREEPORT MCMORAN INC 4625 on September 27, 2024 and sell it today you would lose (350.00) from holding FREEPORT MCMORAN INC 4625 or give up 3.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Entegris  vs.  FREEPORT MCMORAN INC 4625

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.

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FREEPORT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Entegris and FREEPORT

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

The idea behind Entegris and FREEPORT MCMORAN INC 4625 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.