Correlation Between Grupo Sports and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Grupo Sports 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 Grupo Sports and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and Applied Materials, you can compare the effects of market volatilities on Grupo Sports 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 Grupo Sports with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Applied Materials.
Diversification Opportunities for Grupo Sports and Applied Materials
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Applied is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Grupo Sports 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 Grupo Sports World 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 Grupo Sports i.e., Grupo Sports and Applied Materials go up and down completely randomly.
Pair Corralation between Grupo Sports and Applied Materials
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 0.63 times more return on investment than Applied Materials. However, Grupo Sports World is 1.58 times less risky than Applied Materials. It trades about 0.12 of its potential returns per unit of risk. Applied Materials is currently generating about 0.02 per unit of risk. If you would invest 525.00 in Grupo Sports World on November 2, 2024 and sell it today you would earn a total of 105.00 from holding Grupo Sports World or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Sports World vs. Applied Materials
Performance |
Timeline |
Grupo Sports World |
Applied Materials |
Grupo Sports and Applied Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Sports and Applied Materials
The main advantage of trading using opposite Grupo Sports and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports 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.Grupo Sports vs. CVS Health | Grupo Sports vs. Grupo Industrial Saltillo | Grupo Sports vs. Micron Technology | Grupo Sports vs. Grupo Hotelero Santa |
Applied Materials vs. Southwest Airlines | Applied Materials vs. Deutsche Bank Aktiengesellschaft | Applied Materials vs. Capital One Financial | Applied Materials vs. DXC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |