Correlation Between Entegris and Advanced Micro

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

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

Diversification Opportunities for Entegris and Advanced Micro

0.73

Correlation Coefficient

Entegris  Advanced Micro

Poor diversification

The 3 months correlation between Entegris and Advanced is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Entegris i.e., Entegris and Advanced Micro go up and down completely randomly.

Pair Corralation between Entegris and Advanced Micro

Given the investment horizon of 90 days Entegris is expected to under-perform the Advanced Micro. In addition to that, Entegris is 1.33 times more volatile than Advanced Micro Devices. It trades about -0.01 of its total potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.39 per unit of volatility. If you would invest  9,880  in Advanced Micro Devices on May 2, 2025 and sell it today you would earn a total of  8,071  from holding Advanced Micro Devices or generate 81.69% return on investment over 90 days.

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

Entegris  vs.  Advanced Micro Devices

Entegris

Risk-Adjusted Performance

OK

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.

Advanced Micro Devices

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Advanced Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entegris and Advanced Micro

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

The idea behind Entegris and Advanced Micro Devices 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.