Correlation Between DeVry Education and Applied Materials
Can any of the company-specific risk be diversified away by investing in both DeVry Education 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 DeVry Education and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DeVry Education Group and Applied Materials, you can compare the effects of market volatilities on DeVry Education 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 DeVry Education with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of DeVry Education and Applied Materials.
Diversification Opportunities for DeVry Education and Applied Materials
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between DeVry and Applied is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding DeVry Education Group and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and DeVry Education 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 DeVry Education Group 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 DeVry Education i.e., DeVry Education and Applied Materials go up and down completely randomly.
Pair Corralation between DeVry Education and Applied Materials
Assuming the 90 days horizon DeVry Education Group is expected to generate 0.64 times more return on investment than Applied Materials. However, DeVry Education Group is 1.56 times less risky than Applied Materials. It trades about 0.16 of its potential returns per unit of risk. Applied Materials is currently generating about -0.01 per unit of risk. If you would invest 8,600 in DeVry Education Group on October 30, 2024 and sell it today you would earn a total of 950.00 from holding DeVry Education Group or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DeVry Education Group vs. Applied Materials
Performance |
| Timeline |
| DeVry Education Group |
| Applied Materials |
DeVry Education and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DeVry Education and Applied Materials
The main advantage of trading using opposite DeVry Education and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DeVry Education 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.| DeVry Education vs. Tyson Foods | DeVry Education vs. SENECA FOODS A | DeVry Education vs. PATTIES FOODS | DeVry Education vs. Maple Leaf Foods |
| Applied Materials vs. ASML Holding NV | Applied Materials vs. KLA Corporation | Applied Materials vs. Teradyne | Applied Materials vs. ASM International NV |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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