Correlation Between Applovin Corp and Skyworks Solutions

Can any of the company-specific risk be diversified away by investing in both Applovin Corp and Skyworks Solutions 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 Applovin Corp and Skyworks Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Applovin Corp and Skyworks Solutions, you can compare the effects of market volatilities on Applovin Corp and Skyworks Solutions 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 Applovin Corp with a short position of Skyworks Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applovin Corp and Skyworks Solutions.

Diversification Opportunities for Applovin Corp and Skyworks Solutions

-0.88

Correlation Coefficient

Applovin Corp  Skyworks Solutions

Pay attention - limited upside

The 3 months correlation between Applovin and Skyworks is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Applovin Corp and Skyworks Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skyworks Solutions and Applovin Corp 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 Applovin Corp are associated (or correlated) with Skyworks Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skyworks Solutions has no effect on the direction of Applovin Corp i.e., Applovin Corp and Skyworks Solutions go up and down completely randomly.

Pair Corralation between Applovin Corp and Skyworks Solutions

Considering the 90-day investment horizon Applovin Corp is expected to generate 3.42 times more return on investment than Skyworks Solutions. However, Applovin Corp is 3.42 times more volatile than Skyworks Solutions. It trades about 0.34 of its potential returns per unit of risk. Skyworks Solutions is currently generating about -0.11 per unit of risk. If you would invest  8,813  in Applovin Corp on September 2, 2024 and sell it today you would earn a total of  24,862  from holding Applovin Corp or generate 282.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Applovin Corp  vs.  Skyworks Solutions

Applovin Corp

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Applovin Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Applovin Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Skyworks Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skyworks Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Applovin Corp and Skyworks Solutions

The main advantage of trading using opposite Applovin Corp and Skyworks Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applovin Corp position performs unexpectedly, Skyworks Solutions 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 Skyworks Solutions will offset losses from the drop in Skyworks Solutions' long position.

The idea behind Applovin Corp and Skyworks Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.