Correlation Between Suntory Beverage and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and APPLIED MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and APPLIED MATERIALS, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and APPLIED MATERIALS.
Diversification Opportunities for Suntory Beverage and APPLIED MATERIALS
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Suntory and APPLIED is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Suntory Beverage and APPLIED MATERIALS
Assuming the 90 days horizon Suntory Beverage Food is expected to generate 0.69 times more return on investment than APPLIED MATERIALS. However, Suntory Beverage Food is 1.44 times less risky than APPLIED MATERIALS. It trades about 0.01 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about -0.09 per unit of risk. If you would invest 3,038 in Suntory Beverage Food on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Suntory Beverage Food or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Suntory Beverage Food vs. APPLIED MATERIALS
Performance |
| Timeline |
| Suntory Beverage Food |
| APPLIED MATERIALS |
Suntory Beverage and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and APPLIED MATERIALS
The main advantage of trading using opposite Suntory Beverage and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. APPLIED MATERIALS | Suntory Beverage vs. Verizon Communications | Suntory Beverage vs. China Communications Services | Suntory Beverage vs. Cogent Communications Holdings |
| APPLIED MATERIALS vs. The Hanover Insurance | APPLIED MATERIALS vs. ZINC MEDIA GR | APPLIED MATERIALS vs. PARKEN Sport Entertainment | APPLIED MATERIALS vs. SBI Insurance Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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