Correlation Between Applied Materials and CHRISTIAN DIOR
Can any of the company-specific risk be diversified away by investing in both Applied Materials and CHRISTIAN DIOR 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 CHRISTIAN DIOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and CHRISTIAN DIOR ADR14EO2, you can compare the effects of market volatilities on Applied Materials and CHRISTIAN DIOR 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 CHRISTIAN DIOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and CHRISTIAN DIOR.
Diversification Opportunities for Applied Materials and CHRISTIAN DIOR
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Applied and CHRISTIAN is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and CHRISTIAN DIOR ADR14EO2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRISTIAN DIOR ADR14EO2 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 CHRISTIAN DIOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRISTIAN DIOR ADR14EO2 has no effect on the direction of Applied Materials i.e., Applied Materials and CHRISTIAN DIOR go up and down completely randomly.
Pair Corralation between Applied Materials and CHRISTIAN DIOR
Assuming the 90 days horizon Applied Materials is expected to generate 1.39 times more return on investment than CHRISTIAN DIOR. However, Applied Materials is 1.39 times more volatile than CHRISTIAN DIOR ADR14EO2. It trades about 0.05 of its potential returns per unit of risk. CHRISTIAN DIOR ADR14EO2 is currently generating about -0.01 per unit of risk. If you would invest 10,849 in Applied Materials on November 6, 2024 and sell it today you would earn a total of 6,249 from holding Applied Materials or generate 57.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. CHRISTIAN DIOR ADR14EO2
Performance |
| Timeline |
| Applied Materials |
| CHRISTIAN DIOR ADR14EO2 |
Applied Materials and CHRISTIAN DIOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and CHRISTIAN DIOR
The main advantage of trading using opposite Applied Materials and CHRISTIAN DIOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, CHRISTIAN DIOR 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 CHRISTIAN DIOR will offset losses from the drop in CHRISTIAN DIOR's long position.| Applied Materials vs. Flutter Entertainment PLC | Applied Materials vs. BII Railway Transportation | Applied Materials vs. GOLD ROAD RES | Applied Materials vs. PARKEN Sport Entertainment |
| CHRISTIAN DIOR vs. LVMH Mot Hennessy | CHRISTIAN DIOR vs. LVMH Mot Hennessy | CHRISTIAN DIOR vs. LVMH Mot Hennessy | CHRISTIAN DIOR vs. Herms International Socit |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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