Correlation Between Cohu and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Cohu and Applied Materials 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 Cohu and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and Applied Materials, you can compare the effects of market volatilities on Cohu 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 Cohu with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and Applied Materials.
Diversification Opportunities for Cohu and Applied Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cohu and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Cohu 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 Cohu Inc 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 Cohu i.e., Cohu and Applied Materials go up and down completely randomly.
Pair Corralation between Cohu and Applied Materials
Given the investment horizon of 90 days Cohu Inc is expected to under-perform the Applied Materials. But the stock apears to be less risky and, when comparing its historical volatility, Cohu Inc is 1.09 times less risky than Applied Materials. The stock trades about -0.02 of its potential returns per unit of risk. The Applied Materials is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 10,753 in Applied Materials on August 31, 2024 and sell it today you would earn a total of 6,379 from holding Applied Materials or generate 59.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohu Inc vs. Applied Materials
Performance |
| Timeline |
| Cohu Inc |
| Applied Materials |
Cohu and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and Applied Materials
The main advantage of trading using opposite Cohu and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu 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.| Cohu vs. Onto Innovation | Cohu vs. Photronics | Cohu vs. Ultra Clean Holdings | Cohu vs. Axcelis Technologies |
| Applied Materials vs. KLA Tencor | Applied Materials vs. ASML Holding NV | Applied Materials vs. Axcelis Technologies | Applied Materials vs. Teradyne |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |