Correlation Between APPLIED MATERIALS and Charles Schwab
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and Charles Schwab 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 Charles Schwab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and The Charles Schwab, you can compare the effects of market volatilities on APPLIED MATERIALS and Charles Schwab 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 Charles Schwab. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Charles Schwab.
Diversification Opportunities for APPLIED MATERIALS and Charles Schwab
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between APPLIED and Charles is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and The Charles Schwab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles Schwab 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 Charles Schwab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles Schwab has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and Charles Schwab go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and Charles Schwab
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 58.85 times less return on investment than Charles Schwab. But when comparing it to its historical volatility, APPLIED MATERIALS is 1.07 times less risky than Charles Schwab. It trades about 0.01 of its potential returns per unit of risk. The Charles Schwab is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 6,470 in The Charles Schwab on September 1, 2024 and sell it today you would earn a total of 1,351 from holding The Charles Schwab or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
APPLIED MATERIALS vs. The Charles Schwab
Performance |
| Timeline |
| APPLIED MATERIALS |
| Charles Schwab |
APPLIED MATERIALS and Charles Schwab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and Charles Schwab
The main advantage of trading using opposite APPLIED MATERIALS and Charles Schwab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS position performs unexpectedly, Charles Schwab 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 Charles Schwab will offset losses from the drop in Charles Schwab's long position.| APPLIED MATERIALS vs. QBE Insurance Group | APPLIED MATERIALS vs. Selective Insurance Group | APPLIED MATERIALS vs. Singapore Reinsurance | APPLIED MATERIALS vs. United Natural Foods |
| Charles Schwab vs. APPLIED MATERIALS | Charles Schwab vs. Plastic Omnium | Charles Schwab vs. Materialise NV | Charles Schwab vs. MagnaChip Semiconductor Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |