Correlation Between Applied Materials and PVH Corp
Can any of the company-specific risk be diversified away by investing in both Applied Materials and PVH Corp 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 PVH Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and PVH Corp, you can compare the effects of market volatilities on Applied Materials and PVH Corp 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 PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and PVH Corp.
Diversification Opportunities for Applied Materials and PVH Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and PVH is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Applied Materials i.e., Applied Materials and PVH Corp go up and down completely randomly.
Pair Corralation between Applied Materials and PVH Corp
Assuming the 90 days horizon Applied Materials is expected to generate 1.28 times more return on investment than PVH Corp. However, Applied Materials is 1.28 times more volatile than PVH Corp. It trades about 0.06 of its potential returns per unit of risk. PVH Corp is currently generating about 0.01 per unit of risk. If you would invest 16,073 in Applied Materials on October 16, 2024 and sell it today you would earn a total of 649.00 from holding Applied Materials or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. PVH Corp
Performance |
| Timeline |
| Applied Materials |
| PVH Corp |
Applied Materials and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and PVH Corp
The main advantage of trading using opposite Applied Materials and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp's long position.| Applied Materials vs. LOANDEPOT INC A | Applied Materials vs. FUYO GENERAL LEASE | Applied Materials vs. DeVry Education Group | Applied Materials vs. TAL Education Group |
| PVH Corp vs. Urban Outfitters | PVH Corp vs. SANOK RUBBER ZY | PVH Corp vs. Applied Materials | PVH Corp vs. Solstad Offshore ASA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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