Correlation Between Melco Resorts and Applied Materials,
Can any of the company-specific risk be diversified away by investing in both Melco Resorts 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 Melco Resorts and Applied Materials, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melco Resorts Entertainment and Applied Materials,, you can compare the effects of market volatilities on Melco Resorts 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 Melco Resorts with a short position of Applied Materials,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melco Resorts and Applied Materials,.
Diversification Opportunities for Melco Resorts and Applied Materials,
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melco and Applied is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Melco Resorts Entertainment and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, and Melco Resorts 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 Melco Resorts Entertainment 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 Melco Resorts i.e., Melco Resorts and Applied Materials, go up and down completely randomly.
Pair Corralation between Melco Resorts and Applied Materials,
Assuming the 90 days trading horizon Melco Resorts Entertainment is expected to under-perform the Applied Materials,. But the stock apears to be less risky and, when comparing its historical volatility, Melco Resorts Entertainment is 1.26 times less risky than Applied Materials,. The stock trades about -0.35 of its potential returns per unit of risk. The Applied Materials, is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 10,400 in Applied Materials, on October 25, 2024 and sell it today you would earn a total of 1,192 from holding Applied Materials, or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melco Resorts Entertainment vs. Applied Materials,
Performance |
| Timeline |
| Melco Resorts Entert |
| Applied Materials, |
Melco Resorts and Applied Materials, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melco Resorts and Applied Materials,
The main advantage of trading using opposite Melco Resorts and Applied Materials, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melco Resorts 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,'s long position.| Melco Resorts vs. Chunghwa Telecom Co, | Melco Resorts vs. KB Financial Group | Melco Resorts vs. The Hartford Financial | Melco Resorts vs. Broadridge Financial Solutions, |
| Applied Materials, vs. Clover Health Investments, | Applied Materials, vs. Unity Software | Applied Materials, vs. Seagate Technology Holdings | Applied Materials, vs. Align Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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