Correlation Between METAIR INVTS and Applied Materials
Can any of the company-specific risk be diversified away by investing in both METAIR INVTS 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 METAIR INVTS and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METAIR INVTS LTD and Applied Materials, you can compare the effects of market volatilities on METAIR INVTS 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 METAIR INVTS with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of METAIR INVTS and Applied Materials.
Diversification Opportunities for METAIR INVTS and Applied Materials
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between METAIR and Applied is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding METAIR INVTS LTD and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and METAIR INVTS 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 METAIR INVTS LTD 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 METAIR INVTS i.e., METAIR INVTS and Applied Materials go up and down completely randomly.
Pair Corralation between METAIR INVTS and Applied Materials
Assuming the 90 days trading horizon METAIR INVTS LTD is expected to under-perform the Applied Materials. In addition to that, METAIR INVTS is 1.98 times more volatile than Applied Materials. It trades about -0.02 of its total potential returns per unit of risk. Applied Materials is currently generating about 0.04 per unit of volatility. If you would invest 13,608 in Applied Materials on October 16, 2024 and sell it today you would earn a total of 3,114 from holding Applied Materials or generate 22.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
METAIR INVTS LTD vs. Applied Materials
Performance |
| Timeline |
| METAIR INVTS LTD |
| Applied Materials |
METAIR INVTS and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METAIR INVTS and Applied Materials
The main advantage of trading using opposite METAIR INVTS and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METAIR INVTS 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.| METAIR INVTS vs. Applied Materials | METAIR INVTS vs. COPLAND ROAD CAPITAL | METAIR INVTS vs. VIRGIN WINES UK | METAIR INVTS vs. Materialise NV |
| Applied Materials vs. LOANDEPOT INC A | Applied Materials vs. FUYO GENERAL LEASE | Applied Materials vs. DeVry Education Group | Applied Materials vs. TAL Education Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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