Correlation Between Nature Wood and Entegris

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

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

Diversification Opportunities for Nature Wood and Entegris

0.01

Correlation Coefficient

Nature Wood  Entegris

Significant diversification

The 3 months correlation between Nature and Entegris is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nature Wood Group and Entegris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entegris and Nature Wood 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 Nature Wood Group 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 Nature Wood i.e., Nature Wood and Entegris go up and down completely randomly.

Pair Corralation between Nature Wood and Entegris

Given the investment horizon of 90 days Nature Wood Group is expected to generate 2.21 times more return on investment than Entegris. However, Nature Wood is 2.21 times more volatile than Entegris. It trades about 0.06 of its potential returns per unit of risk. Entegris is currently generating about -0.03 per unit of risk. If you would invest  119.00  in Nature Wood Group on December 29, 2024 and sell it today you would earn a total of  15.00  from holding Nature Wood Group or generate 12.61% return on investment over 90 days.

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

Nature Wood Group  vs.  Entegris

Nature Wood Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nature Wood Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Nature Wood disclosed solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Nature Wood and Entegris

The main advantage of trading using opposite Nature Wood and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nature Wood 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 Nature Wood Group 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 Stocks Directory module to find actively traded stocks across global markets.