Correlation Between Applied Materials and Rubicon Technology
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Rubicon Technology 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 Rubicon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Rubicon Technology, you can compare the effects of market volatilities on Applied Materials and Rubicon Technology 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 Rubicon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Rubicon Technology.
Diversification Opportunities for Applied Materials and Rubicon Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Applied and Rubicon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Rubicon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technology 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 Rubicon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technology has no effect on the direction of Applied Materials i.e., Applied Materials and Rubicon Technology go up and down completely randomly.
Pair Corralation between Applied Materials and Rubicon Technology
Given the investment horizon of 90 days Applied Materials is expected to generate 0.34 times more return on investment than Rubicon Technology. However, Applied Materials is 2.93 times less risky than Rubicon Technology. It trades about 0.05 of its potential returns per unit of risk. Rubicon Technology is currently generating about -0.01 per unit of risk. If you would invest 11,796 in Applied Materials on October 25, 2024 and sell it today you would earn a total of 7,270 from holding Applied Materials or generate 61.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.01% |
| Values | Daily Returns |
Applied Materials vs. Rubicon Technology
Performance |
| Timeline |
| Applied Materials |
| Rubicon Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Applied Materials and Rubicon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Rubicon Technology
The main advantage of trading using opposite Applied Materials and Rubicon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Rubicon Technology 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 Rubicon Technology will offset losses from the drop in Rubicon Technology's long position.| Applied Materials vs. KLA Tencor | Applied Materials vs. ASML Holding NV | Applied Materials vs. Axcelis Technologies | Applied Materials vs. Teradyne |
| Rubicon Technology vs. Axcelis Technologies | Rubicon Technology vs. inTest | Rubicon Technology vs. Lam Research Corp | Rubicon Technology vs. Photronics |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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