Correlation Between Gruppo Mutuionline and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Gruppo Mutuionline 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 Gruppo Mutuionline and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gruppo Mutuionline SpA and Applied Materials, you can compare the effects of market volatilities on Gruppo Mutuionline 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 Gruppo Mutuionline with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo Mutuionline and Applied Materials.
Diversification Opportunities for Gruppo Mutuionline and Applied Materials
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gruppo and Applied is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Gruppo Mutuionline 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 Gruppo Mutuionline SpA 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 Gruppo Mutuionline i.e., Gruppo Mutuionline and Applied Materials go up and down completely randomly.
Pair Corralation between Gruppo Mutuionline and Applied Materials
Assuming the 90 days trading horizon Gruppo Mutuionline SpA is expected to under-perform the Applied Materials. But the stock apears to be less risky and, when comparing its historical volatility, Gruppo Mutuionline SpA is 1.46 times less risky than Applied Materials. The stock trades about -0.02 of its potential returns per unit of risk. The Applied Materials is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 16,099 in Applied Materials on October 19, 2024 and sell it today you would earn a total of 2,421 from holding Applied Materials or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gruppo Mutuionline SpA vs. Applied Materials
Performance |
| Timeline |
| Gruppo Mutuionline SpA |
| Applied Materials |
Gruppo Mutuionline and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruppo Mutuionline and Applied Materials
The main advantage of trading using opposite Gruppo Mutuionline and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo Mutuionline 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.| Gruppo Mutuionline vs. United Rentals | Gruppo Mutuionline vs. Austevoll Seafood ASA | Gruppo Mutuionline vs. MOLSON RS BEVERAGE | Gruppo Mutuionline vs. CN MODERN DAIRY |
| Applied Materials vs. EAGLE MATERIALS | Applied Materials vs. BOS BETTER ONLINE | Applied Materials vs. Plastic Omnium | Applied Materials vs. Gruppo Mutuionline SpA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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