Correlation Between APPLIED MATERIALS and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and ANGI Homeservices 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 ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and ANGI Homeservices, you can compare the effects of market volatilities on APPLIED MATERIALS and ANGI Homeservices 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 ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and ANGI Homeservices.
Diversification Opportunities for APPLIED MATERIALS and ANGI Homeservices
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between APPLIED and ANGI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices 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 ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and ANGI Homeservices go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and ANGI Homeservices
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 0.58 times more return on investment than ANGI Homeservices. However, APPLIED MATERIALS is 1.72 times less risky than ANGI Homeservices. It trades about -0.07 of its potential returns per unit of risk. ANGI Homeservices is currently generating about -0.11 per unit of risk. If you would invest 17,855 in APPLIED MATERIALS on August 30, 2024 and sell it today you would lose (1,733) from holding APPLIED MATERIALS or give up 9.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. ANGI Homeservices
Performance |
| Timeline |
| APPLIED MATERIALS |
| ANGI Homeservices |
APPLIED MATERIALS and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and ANGI Homeservices
The main advantage of trading using opposite APPLIED MATERIALS and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.| APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Superior Plus Corp | APPLIED MATERIALS vs. SIVERS SEMICONDUCTORS AB |
| ANGI Homeservices vs. Alphabet Class A | ANGI Homeservices vs. Alphabet Class A | ANGI Homeservices vs. Alphabet | ANGI Homeservices vs. Meta Platforms |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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