Correlation Between Applied Materials, and STAG Industrial,
Can any of the company-specific risk be diversified away by investing in both Applied Materials, and STAG Industrial, 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 STAG Industrial, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials, and STAG Industrial,, you can compare the effects of market volatilities on Applied Materials, and STAG Industrial, 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 STAG Industrial,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials, and STAG Industrial,.
Diversification Opportunities for Applied Materials, and STAG Industrial,
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and STAG is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials, and STAG Industrial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial, 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 STAG Industrial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial, has no effect on the direction of Applied Materials, i.e., Applied Materials, and STAG Industrial, go up and down completely randomly.
Pair Corralation between Applied Materials, and STAG Industrial,
Assuming the 90 days trading horizon Applied Materials, is expected to generate 1.49 times more return on investment than STAG Industrial,. However, Applied Materials, is 1.49 times more volatile than STAG Industrial,. It trades about 0.06 of its potential returns per unit of risk. STAG Industrial, is currently generating about 0.03 per unit of risk. If you would invest 5,590 in Applied Materials, on October 11, 2024 and sell it today you would earn a total of 5,201 from holding Applied Materials, or generate 93.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials, vs. STAG Industrial,
Performance |
| Timeline |
| Applied Materials, |
| STAG Industrial, |
Applied Materials, and STAG Industrial, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials, and STAG Industrial,
The main advantage of trading using opposite Applied Materials, and STAG Industrial, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials, position performs unexpectedly, STAG Industrial, 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 STAG Industrial, will offset losses from the drop in STAG Industrial,'s long position.| Applied Materials, vs. DXC Technology | Applied Materials, vs. Align Technology | Applied Materials, vs. Zebra Technologies | Applied Materials, vs. Akamai Technologies, |
| STAG Industrial, vs. Taiwan Semiconductor Manufacturing | STAG Industrial, vs. Apple Inc | STAG Industrial, vs. Alibaba Group Holding | STAG Industrial, vs. Banco Santander Chile |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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