Correlation Between APPLIED MATERIALS and Corporate Office
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and Corporate Office 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 Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and Corporate Office Properties, you can compare the effects of market volatilities on APPLIED MATERIALS and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Corporate Office.
Diversification Opportunities for APPLIED MATERIALS and Corporate Office
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between APPLIED and Corporate is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and Corporate Office go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and Corporate Office
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 1.65 times more return on investment than Corporate Office. However, APPLIED MATERIALS is 1.65 times more volatile than Corporate Office Properties. It trades about 0.04 of its potential returns per unit of risk. Corporate Office Properties is currently generating about 0.03 per unit of risk. If you would invest 10,990 in APPLIED MATERIALS on November 28, 2024 and sell it today you would earn a total of 4,780 from holding APPLIED MATERIALS or generate 43.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. Corporate Office Properties
Performance |
| Timeline |
| APPLIED MATERIALS |
| Corporate Office Pro |
APPLIED MATERIALS and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and Corporate Office
The main advantage of trading using opposite APPLIED MATERIALS and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| APPLIED MATERIALS vs. MCEWEN MINING INC | APPLIED MATERIALS vs. Jacquet Metal Service | APPLIED MATERIALS vs. Sunny Optical Technology | APPLIED MATERIALS vs. GRIFFIN MINING LTD |
| Corporate Office vs. Gladstone Investment | Corporate Office vs. Addtech AB | Corporate Office vs. MidCap Financial Investment | Corporate Office vs. THORNEY TECHS LTD |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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