Correlation Between AGRICULTBK HADR25 and Applied Materials
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 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 AGRICULTBK HADR25 and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and Applied Materials, you can compare the effects of market volatilities on AGRICULTBK HADR25 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 AGRICULTBK HADR25 with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and Applied Materials.
Diversification Opportunities for AGRICULTBK HADR25 and Applied Materials
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGRICULTBK and Applied is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and AGRICULTBK HADR25 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 AGRICULTBK HADR25 YC 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 AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and Applied Materials go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR25 and Applied Materials
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.78 times more return on investment than Applied Materials. However, AGRICULTBK HADR25 YC is 1.28 times less risky than Applied Materials. It trades about 0.15 of its potential returns per unit of risk. Applied Materials is currently generating about -0.04 per unit of risk. If you would invest 1,050 in AGRICULTBK HADR25 YC on September 24, 2024 and sell it today you would earn a total of 210.00 from holding AGRICULTBK HADR25 YC or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AGRICULTBK HADR25 YC vs. Applied Materials
Performance |
Timeline |
AGRICULTBK HADR25 |
Applied Materials |
AGRICULTBK HADR25 and Applied Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AGRICULTBK HADR25 and Applied Materials
The main advantage of trading using opposite AGRICULTBK HADR25 and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 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.AGRICULTBK HADR25 vs. INDCOMMBK CHINA ADR20 | AGRICULTBK HADR25 vs. Industrial and Commercial | AGRICULTBK HADR25 vs. CHINA BANK ADR20 | AGRICULTBK HADR25 vs. BANK OCHINA H |
Applied Materials vs. ASML HOLDING NY | Applied Materials vs. ASML Holding NV | Applied Materials vs. ASML Holding NV | Applied Materials vs. Tokyo Electron Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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