Correlation Between Applied Materials and METAIR INVTS
Can any of the company-specific risk be diversified away by investing in both Applied Materials and METAIR INVTS 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 METAIR INVTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and METAIR INVTS LTD, you can compare the effects of market volatilities on Applied Materials and METAIR INVTS 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 METAIR INVTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and METAIR INVTS.
Diversification Opportunities for Applied Materials and METAIR INVTS
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and METAIR is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and METAIR INVTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METAIR INVTS LTD 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 METAIR INVTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METAIR INVTS LTD has no effect on the direction of Applied Materials i.e., Applied Materials and METAIR INVTS go up and down completely randomly.
Pair Corralation between Applied Materials and METAIR INVTS
Assuming the 90 days horizon Applied Materials is expected to generate 0.61 times more return on investment than METAIR INVTS. However, Applied Materials is 1.64 times less risky than METAIR INVTS. It trades about -0.01 of its potential returns per unit of risk. METAIR INVTS LTD is currently generating about -0.09 per unit of risk. If you would invest 16,878 in Applied Materials on October 30, 2024 and sell it today you would lose (456.00) from holding Applied Materials or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. METAIR INVTS LTD
Performance |
| Timeline |
| Applied Materials |
| METAIR INVTS LTD |
Applied Materials and METAIR INVTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and METAIR INVTS
The main advantage of trading using opposite Applied Materials and METAIR INVTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, METAIR INVTS 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 METAIR INVTS will offset losses from the drop in METAIR INVTS's long position.| Applied Materials vs. ASML Holding NV | Applied Materials vs. KLA Corporation | Applied Materials vs. Teradyne | Applied Materials vs. ASM International NV |
| METAIR INVTS vs. Dno ASA | METAIR INVTS vs. DENSO P ADR | METAIR INVTS vs. Aptiv PLC | METAIR INVTS vs. Bridgestone |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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