Correlation Between Veeco Instruments and Entegris

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

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

Diversification Opportunities for Veeco Instruments and Entegris

0.36

Correlation Coefficient

Veeco Instruments  Entegris

Weak diversification

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

Pair Corralation between Veeco Instruments and Entegris

Given the investment horizon of 90 days Veeco Instruments is expected to under-perform the Entegris. In addition to that, Veeco Instruments is 1.01 times more volatile than Entegris. It trades about -0.17 of its total potential returns per unit of risk. Entegris is currently generating about -0.03 per unit of volatility. If you would invest  9,944  in Entegris on December 29, 2024 and sell it today you would lose (690.00) from holding Entegris or give up 6.94% of portfolio value over 90 days.

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

Veeco Instruments  vs.  Entegris

Veeco Instruments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Veeco Instruments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental 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 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 Veeco Instruments and Entegris

The main advantage of trading using opposite Veeco Instruments and Entegris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veeco Instruments 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 Veeco Instruments 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.