Correlation Between Applied Materials and QUEEN S
Can any of the company-specific risk be diversified away by investing in both Applied Materials and QUEEN S 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 QUEEN S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and QUEEN S ROAD, you can compare the effects of market volatilities on Applied Materials and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and QUEEN S.
Diversification Opportunities for Applied Materials and QUEEN S
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and QUEEN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Applied Materials i.e., Applied Materials and QUEEN S go up and down completely randomly.
Pair Corralation between Applied Materials and QUEEN S
Assuming the 90 days horizon Applied Materials is expected to generate 0.69 times more return on investment than QUEEN S. However, Applied Materials is 1.45 times less risky than QUEEN S. It trades about 0.05 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about -0.05 per unit of risk. If you would invest 17,167 in Applied Materials on October 26, 2024 and sell it today you would earn a total of 1,171 from holding Applied Materials or generate 6.82% 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. QUEEN S ROAD
Performance |
| Timeline |
| Applied Materials |
| QUEEN S ROAD |
Applied Materials and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and QUEEN S
The main advantage of trading using opposite Applied Materials and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| Applied Materials vs. ASML Holding NV | Applied Materials vs. KLA Corporation | Applied Materials vs. Teradyne | Applied Materials vs. ASM International NV |
| QUEEN S vs. Fukuyama Transporting Co | QUEEN S vs. SOEDER SPORTFISKE AB | QUEEN S vs. Applied Materials | QUEEN S vs. THRACE PLASTICS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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