Correlation Between Cboe UK and Applied Materials
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By analyzing existing cross correlation between Cboe UK Consumer and Applied Materials, you can compare the effects of market volatilities on Cboe UK and Applied Materials 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 Cboe UK with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Applied Materials.
Diversification Opportunities for Cboe UK and Applied Materials
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cboe and Applied is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Cboe UK 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 Cboe UK Consumer are associated (or correlated) with Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of Cboe UK i.e., Cboe UK and Applied Materials go up and down completely randomly.
Pair Corralation between Cboe UK and Applied Materials
Assuming the 90 days trading horizon Cboe UK is expected to generate 2.11 times less return on investment than Applied Materials. But when comparing it to its historical volatility, Cboe UK Consumer is 2.56 times less risky than Applied Materials. It trades about 0.07 of its potential returns per unit of risk. Applied Materials is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,255 in Applied Materials on August 31, 2024 and sell it today you would earn a total of 5,902 from holding Applied Materials or generate 52.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.77% |
| Values | Daily Returns |
Cboe UK Consumer vs. Applied Materials
Performance |
| Timeline |
Cboe UK and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Applied Materials
Pair trading matchups for Applied Materials
Pair Trading with Cboe UK and Applied Materials
The main advantage of trading using opposite Cboe UK and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK position performs unexpectedly, Applied Materials 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 Applied Materials will offset losses from the drop in Applied Materials' long position.| Cboe UK vs. Lendinvest PLC | Cboe UK vs. Monster Beverage Corp | Cboe UK vs. Cembra Money Bank | Cboe UK vs. UNIQA Insurance Group |
| Applied Materials vs. Hochschild Mining plc | Applied Materials vs. Check Point Software | Applied Materials vs. Accsys Technologies PLC | Applied Materials vs. Gaming Realms plc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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