Correlation Between Applied Materials and Urban Outfitters
Can any of the company-specific risk be diversified away by investing in both Applied Materials and Urban Outfitters 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 Urban Outfitters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Urban Outfitters, you can compare the effects of market volatilities on Applied Materials and Urban Outfitters 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 Urban Outfitters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Urban Outfitters.
Diversification Opportunities for Applied Materials and Urban Outfitters
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Applied and Urban is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Urban Outfitters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Outfitters 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 Urban Outfitters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Outfitters has no effect on the direction of Applied Materials i.e., Applied Materials and Urban Outfitters go up and down completely randomly.
Pair Corralation between Applied Materials and Urban Outfitters
Assuming the 90 days horizon Applied Materials is expected to generate 1.39 times less return on investment than Urban Outfitters. But when comparing it to its historical volatility, Applied Materials is 1.04 times less risky than Urban Outfitters. It trades about 0.05 of its potential returns per unit of risk. Urban Outfitters is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,662 in Urban Outfitters on October 26, 2024 and sell it today you would earn a total of 2,938 from holding Urban Outfitters or generate 110.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. Urban Outfitters
Performance |
| Timeline |
| Applied Materials |
| Urban Outfitters |
Applied Materials and Urban Outfitters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Urban Outfitters
The main advantage of trading using opposite Applied Materials and Urban Outfitters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, Urban Outfitters 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 Urban Outfitters will offset losses from the drop in Urban Outfitters' long position.| Applied Materials vs. GAMING FAC SA | Applied Materials vs. GEAR4MUSIC LS 10 | Applied Materials vs. Boyd Gaming | Applied Materials vs. UNIVMUSIC GRPADR050 |
| Urban Outfitters vs. Mitsubishi Gas Chemical | Urban Outfitters vs. PTT Global Chemical | Urban Outfitters vs. SEKISUI CHEMICAL | Urban Outfitters vs. China Resources Beer |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |