Correlation Between Bilibili and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Bilibili and APPLIED MATERIALS 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 Bilibili and APPLIED MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilibili and APPLIED MATERIALS, you can compare the effects of market volatilities on Bilibili and APPLIED MATERIALS 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 Bilibili with a short position of APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and APPLIED MATERIALS.
Diversification Opportunities for Bilibili and APPLIED MATERIALS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bilibili and APPLIED is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS and Bilibili 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 Bilibili are associated (or correlated) with APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Bilibili i.e., Bilibili and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Bilibili and APPLIED MATERIALS
Assuming the 90 days trading horizon Bilibili is expected to generate 1.52 times less return on investment than APPLIED MATERIALS. In addition to that, Bilibili is 1.81 times more volatile than APPLIED MATERIALS. It trades about 0.02 of its total potential returns per unit of risk. APPLIED MATERIALS is currently generating about 0.06 per unit of volatility. If you would invest 9,902 in APPLIED MATERIALS on August 25, 2024 and sell it today you would earn a total of 6,890 from holding APPLIED MATERIALS or generate 69.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilibili vs. APPLIED MATERIALS
Performance |
| Timeline |
| Bilibili |
| APPLIED MATERIALS |
Bilibili and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilibili and APPLIED MATERIALS
The main advantage of trading using opposite Bilibili and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Bilibili vs. APPLIED MATERIALS | Bilibili vs. Universal Display | Bilibili vs. VULCAN MATERIALS | Bilibili vs. The Yokohama Rubber |
| APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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