Correlation Between APPLIED MATERIALS and CODERE ONLINE
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and CODERE ONLINE 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 CODERE ONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and CODERE ONLINE LUX, you can compare the effects of market volatilities on APPLIED MATERIALS and CODERE ONLINE 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 CODERE ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and CODERE ONLINE.
Diversification Opportunities for APPLIED MATERIALS and CODERE ONLINE
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between APPLIED and CODERE is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and CODERE ONLINE LUX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CODERE ONLINE LUX 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 CODERE ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CODERE ONLINE LUX has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and CODERE ONLINE go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and CODERE ONLINE
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 0.64 times more return on investment than CODERE ONLINE. However, APPLIED MATERIALS is 1.57 times less risky than CODERE ONLINE. It trades about 0.17 of its potential returns per unit of risk. CODERE ONLINE LUX is currently generating about -0.44 per unit of risk. If you would invest 16,382 in APPLIED MATERIALS on October 10, 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. CODERE ONLINE LUX
Performance |
| Timeline |
| APPLIED MATERIALS |
| CODERE ONLINE LUX |
APPLIED MATERIALS and CODERE ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and CODERE ONLINE
The main advantage of trading using opposite APPLIED MATERIALS and CODERE ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS position performs unexpectedly, CODERE ONLINE 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 CODERE ONLINE will offset losses from the drop in CODERE ONLINE's long position.| APPLIED MATERIALS vs. Renesas Electronics | APPLIED MATERIALS vs. SBI Insurance Group | APPLIED MATERIALS vs. ZURICH INSURANCE GROUP | APPLIED MATERIALS vs. Vienna Insurance Group |
| CODERE ONLINE vs. Highlight Communications AG | CODERE ONLINE vs. International Consolidated Airlines | CODERE ONLINE vs. SK TELECOM TDADR | CODERE ONLINE vs. Iridium Communications |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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