Correlation Between APPLIED MATERIALS and Superior Plus
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and Superior Plus Corp, you can compare the effects of market volatilities on APPLIED MATERIALS and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Superior Plus.
Diversification Opportunities for APPLIED MATERIALS and Superior Plus
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between APPLIED and Superior is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and Superior Plus go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and Superior Plus
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 1.09 times more return on investment than Superior Plus. However, APPLIED MATERIALS is 1.09 times more volatile than Superior Plus Corp. It trades about 0.17 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.12 per unit of risk. If you would invest 16,382 in APPLIED MATERIALS on October 9, 2024 and sell it today you would earn a total of 814.00 from holding APPLIED MATERIALS or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. Superior Plus Corp
Performance |
| Timeline |
| APPLIED MATERIALS |
| Superior Plus Corp |
APPLIED MATERIALS and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and Superior Plus
The main advantage of trading using opposite APPLIED MATERIALS and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc | APPLIED MATERIALS vs. Apple Inc |
| Superior Plus vs. GRIFFIN MINING LTD | Superior Plus vs. Forsys Metals Corp | Superior Plus vs. Zijin Mining Group | Superior Plus vs. Jacquet Metal Service |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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