Correlation Between SCREEN Holdings and Applied Materials
Can any of the company-specific risk be diversified away by investing in both SCREEN Holdings 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 SCREEN Holdings and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCREEN Holdings Co and Applied Materials, you can compare the effects of market volatilities on SCREEN Holdings 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 SCREEN Holdings with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCREEN Holdings and Applied Materials.
Diversification Opportunities for SCREEN Holdings and Applied Materials
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCREEN and Applied is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SCREEN Holdings Co and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and SCREEN Holdings 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 SCREEN Holdings Co 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 SCREEN Holdings i.e., SCREEN Holdings and Applied Materials go up and down completely randomly.
Pair Corralation between SCREEN Holdings and Applied Materials
Assuming the 90 days horizon SCREEN Holdings Co is expected to under-perform the Applied Materials. But the otc stock apears to be less risky and, when comparing its historical volatility, SCREEN Holdings Co is 1.82 times less risky than Applied Materials. The otc stock trades about -0.79 of its potential returns per unit of risk. The Applied Materials is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 18,487 in Applied Materials on August 31, 2024 and sell it today you would lose (1,355) from holding Applied Materials or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 18.18% |
| Values | Daily Returns |
SCREEN Holdings Co vs. Applied Materials
Performance |
| Timeline |
| SCREEN Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Applied Materials |
SCREEN Holdings and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCREEN Holdings and Applied Materials
The main advantage of trading using opposite SCREEN Holdings and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCREEN Holdings 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.| SCREEN Holdings vs. Asm Pacific Technology | SCREEN Holdings vs. Disco Corp ADR | SCREEN Holdings vs. Tokyo Electron | SCREEN Holdings vs. Lasertec |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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