Correlation Between Applied Materials and Helical Bar
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Helical Bar 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 Helical Bar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Helical Bar Plc, you can compare the effects of market volatilities on Applied Materials and Helical Bar 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 Helical Bar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Helical Bar.
Diversification Opportunities for Applied Materials and Helical Bar
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Applied and Helical is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Helical Bar Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helical Bar 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 Helical Bar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helical Bar Plc has no effect on the direction of Applied Materials i.e., Applied Materials and Helical Bar go up and down completely randomly.
Pair Corralation between Applied Materials and Helical Bar
Assuming the 90 days trading horizon Applied Materials is expected to generate 1.19 times more return on investment than Helical Bar. However, Applied Materials is 1.19 times more volatile than Helical Bar Plc. It trades about 0.06 of its potential returns per unit of risk. Helical Bar Plc is currently generating about -0.04 per unit of risk. If you would invest 10,802 in Applied Materials on September 4, 2024 and sell it today you would earn a total of 7,351 from holding Applied Materials or generate 68.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Applied Materials vs. Helical Bar Plc
Performance |
| Timeline |
| Applied Materials |
| Helical Bar Plc |
Applied Materials and Helical Bar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Helical Bar
The main advantage of trading using opposite Applied Materials and Helical Bar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Helical Bar 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 Helical Bar will offset losses from the drop in Helical Bar's long position.| Applied Materials vs. Samsung Electronics Co | Applied Materials vs. Samsung Electronics Co | Applied Materials vs. Hyundai Motor | Applied Materials vs. Toyota Motor Corp |
| Helical Bar vs. Fulcrum Metals PLC | Helical Bar vs. Sovereign Metals | Helical Bar vs. Liontrust Asset Management | Helical Bar vs. AfriTin Mining |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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