Correlation Between Everspin Technologies and Entegris

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

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

Diversification Opportunities for Everspin Technologies and Entegris

0.36

Correlation Coefficient

Everspin Technologies  Entegris

Weak diversification

The 3 months correlation between Everspin and Entegris is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Everspin Technologies 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 Everspin Technologies 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 Everspin Technologies i.e., Everspin Technologies and Entegris go up and down completely randomly.

Pair Corralation between Everspin Technologies and Entegris

Given the investment horizon of 90 days Everspin Technologies is expected to under-perform the Entegris. But the stock apears to be less risky and, when comparing its historical volatility, Everspin Technologies is 1.12 times less risky than Entegris. The stock trades about -0.16 of its potential returns per unit of risk. The Entegris is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  9,944  in Entegris on December 29, 2024 and sell it today you would lose (1,070) from holding Entegris or give up 10.76% of portfolio value over 90 days.

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

Everspin Technologies  vs.  Entegris

Everspin Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everspin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent 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.

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 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.

Pair Trading with Everspin Technologies and Entegris

The main advantage of trading using opposite Everspin Technologies and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everspin Technologies 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 Everspin Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.