Correlation Between Applied Materials and Glencore Plc
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Glencore Plc 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 Glencore Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Glencore plc, you can compare the effects of market volatilities on Applied Materials and Glencore Plc 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 Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Glencore Plc.
Diversification Opportunities for Applied Materials and Glencore Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Applied and Glencore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore 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 Glencore Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glencore plc has no effect on the direction of Applied Materials i.e., Applied Materials and Glencore Plc go up and down completely randomly.
Pair Corralation between Applied Materials and Glencore Plc
If you would invest 8,989 in Glencore plc on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Glencore plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. Glencore plc
Performance |
| Timeline |
| Applied Materials |
| Glencore plc |
Applied Materials and Glencore Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Glencore Plc
The main advantage of trading using opposite Applied Materials and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Glencore Plc 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 Glencore Plc will offset losses from the drop in Glencore Plc's long position.| Applied Materials vs. Southwest Airlines | Applied Materials vs. United Airlines Holdings | Applied Materials vs. Verizon Communications | Applied Materials vs. GMxico Transportes SAB |
| Glencore Plc vs. United Airlines Holdings | Glencore Plc vs. Hoteles City Express | Glencore Plc vs. McEwen Mining | Glencore Plc vs. FIBRA Storage |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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