Correlation Between Mamas Creations and Entegris

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

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

Diversification Opportunities for Mamas Creations and Entegris

-0.05

Correlation Coefficient

Mamas Creations  Entegris

Good diversification

The 3 months correlation between Mamas and Entegris is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Mamas Creations 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 Mamas Creations are associated (or correlated) with Entegris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entegris has no effect on the direction of Mamas Creations i.e., Mamas Creations and Entegris go up and down completely randomly.

Pair Corralation between Mamas Creations and Entegris

Given the investment horizon of 90 days Mamas Creations is expected to generate 1.15 times more return on investment than Entegris. However, Mamas Creations is 1.15 times more volatile than Entegris. It trades about 0.11 of its potential returns per unit of risk. Entegris is currently generating about 0.0 per unit of risk. If you would invest  809.00  in Mamas Creations on September 12, 2024 and sell it today you would earn a total of  149.00  from holding Mamas Creations or generate 18.42% return on investment over 90 days.

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

Mamas Creations  vs.  Entegris

Mamas Creations

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mamas Creations are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile primary indicators, Mamas Creations sustained solid returns over the last few months and may actually be approaching a breakup point.

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 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.

Pair Trading with Mamas Creations and Entegris

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

The idea behind Mamas Creations and Entegris 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.