Correlation Between Applied Materials and Accsys Technologies
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Accsys Technologies 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 Applied Materials and Accsys Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Accsys Technologies PLC, you can compare the effects of market volatilities on Applied Materials and Accsys Technologies 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 Applied Materials with a short position of Accsys Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Accsys Technologies.
Diversification Opportunities for Applied Materials and Accsys Technologies
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Applied and Accsys is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Accsys Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accsys Technologies PLC and Applied Materials 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 Applied Materials are associated (or correlated) with Accsys Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accsys Technologies PLC has no effect on the direction of Applied Materials i.e., Applied Materials and Accsys Technologies go up and down completely randomly.
Pair Corralation between Applied Materials and Accsys Technologies
Assuming the 90 days trading horizon Applied Materials is expected to under-perform the Accsys Technologies. In addition to that, Applied Materials is 1.05 times more volatile than Accsys Technologies PLC. It trades about -0.05 of its total potential returns per unit of risk. Accsys Technologies PLC is currently generating about -0.03 per unit of volatility. If you would invest 5,090 in Accsys Technologies PLC on September 2, 2024 and sell it today you would lose (325.00) from holding Accsys Technologies PLC or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. Accsys Technologies PLC
Performance |
| Timeline |
| Applied Materials |
| Accsys Technologies PLC |
Applied Materials and Accsys Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Accsys Technologies
The main advantage of trading using opposite Applied Materials and Accsys Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Accsys Technologies 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 Accsys Technologies will offset losses from the drop in Accsys Technologies' long position.| Applied Materials vs. Uniper SE | Applied Materials vs. Mulberry Group PLC | Applied Materials vs. London Security Plc | Applied Materials vs. Triad Group PLC |
| Accsys Technologies vs. Bankers Investment Trust | Accsys Technologies vs. Federal Realty Investment | Accsys Technologies vs. Beeks Trading | Accsys Technologies vs. Lowland Investment Co |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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