Correlation Between Data Modul and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Data Modul 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 Data Modul and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data Modul AG and Applied Materials, you can compare the effects of market volatilities on Data Modul 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 Data Modul with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and Applied Materials.
Diversification Opportunities for Data Modul and Applied Materials
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Data and Applied is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Data Modul 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 Data Modul AG 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 Data Modul i.e., Data Modul and Applied Materials go up and down completely randomly.
Pair Corralation between Data Modul and Applied Materials
Assuming the 90 days trading horizon Data Modul AG is expected to under-perform the Applied Materials. But the stock apears to be less risky and, when comparing its historical volatility, Data Modul AG is 1.17 times less risky than Applied Materials. The stock trades about -0.07 of its potential returns per unit of risk. The Applied Materials is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15,438 in Applied Materials on October 29, 2024 and sell it today you would earn a total of 2,374 from holding Applied Materials or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data Modul AG vs. Applied Materials
Performance |
| Timeline |
| Data Modul AG |
| Applied Materials |
Data Modul and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data Modul and Applied Materials
The main advantage of trading using opposite Data Modul and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Modul 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.| Data Modul vs. ETFS Coffee ETC | Data Modul vs. PURETECH HEALTH PLC | Data Modul vs. CLOVER HEALTH INV | Data Modul vs. Coffee Holding Co |
| Applied Materials vs. Tencent Music Entertainment | Applied Materials vs. Prosiebensat 1 Media | Applied Materials vs. Fuji Media Holdings | Applied Materials vs. PENN Entertainment |
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
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |