Correlation Between Applied Materials and Thoresen Thai
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Thoresen Thai 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 Thoresen Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Thoresen Thai Agencies, you can compare the effects of market volatilities on Applied Materials and Thoresen Thai 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 Thoresen Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Thoresen Thai.
Diversification Opportunities for Applied Materials and Thoresen Thai
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Applied and Thoresen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Thoresen Thai Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoresen Thai Agencies 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 Thoresen Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoresen Thai Agencies has no effect on the direction of Applied Materials i.e., Applied Materials and Thoresen Thai go up and down completely randomly.
Pair Corralation between Applied Materials and Thoresen Thai
Assuming the 90 days horizon Applied Materials is expected to generate 0.62 times more return on investment than Thoresen Thai. However, Applied Materials is 1.63 times less risky than Thoresen Thai. It trades about 0.06 of its potential returns per unit of risk. Thoresen Thai Agencies is currently generating about -0.01 per unit of risk. If you would invest 10,069 in Applied Materials on October 13, 2024 and sell it today you would earn a total of 7,123 from holding Applied Materials or generate 70.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Applied Materials vs. Thoresen Thai Agencies
Performance |
| Timeline |
| Applied Materials |
| Thoresen Thai Agencies |
Applied Materials and Thoresen Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Thoresen Thai
The main advantage of trading using opposite Applied Materials and Thoresen Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Thoresen Thai 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 Thoresen Thai will offset losses from the drop in Thoresen Thai's long position.| Applied Materials vs. Southwest Airlines Co | Applied Materials vs. USU Software AG | Applied Materials vs. SINGAPORE AIRLINES | Applied Materials vs. AEGEAN AIRLINES |
| Thoresen Thai vs. MELIA HOTELS | Thoresen Thai vs. Park Hotels Resorts | Thoresen Thai vs. Sanyo Chemical Industries | Thoresen Thai vs. SEKISUI CHEMICAL |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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