Correlation Between Applied Materials, and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both Applied Materials, and Hospital Mater 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 Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials, and Hospital Mater Dei, you can compare the effects of market volatilities on Applied Materials, and Hospital Mater 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 Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials, and Hospital Mater.
Diversification Opportunities for Applied Materials, and Hospital Mater
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Hospital is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials, and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei 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 Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of Applied Materials, i.e., Applied Materials, and Hospital Mater go up and down completely randomly.
Pair Corralation between Applied Materials, and Hospital Mater
Assuming the 90 days trading horizon Applied Materials, is expected to generate 1.18 times more return on investment than Hospital Mater. However, Applied Materials, is 1.18 times more volatile than Hospital Mater Dei. It trades about -0.01 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about -0.09 per unit of risk. If you would invest 10,514 in Applied Materials, on October 30, 2024 and sell it today you would lose (310.00) from holding Applied Materials, or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials, vs. Hospital Mater Dei
Performance |
| Timeline |
| Applied Materials, |
| Hospital Mater Dei |
Applied Materials, and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials, and Hospital Mater
The main advantage of trading using opposite Applied Materials, and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials, position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater's long position.| Applied Materials, vs. LPL Financial Holdings | Applied Materials, vs. Verizon Communications | Applied Materials, vs. HDFC Bank Limited | Applied Materials, vs. Ameriprise Financial |
| Hospital Mater vs. Tyson Foods | Hospital Mater vs. G2D Investments | Hospital Mater vs. STMicroelectronics NV | Hospital Mater vs. United Natural Foods, |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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