Correlation Between Rubicon Technology and Applied Materials

Can any of the company-specific risk be diversified away by investing in both Rubicon Technology 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 Rubicon Technology and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Rubicon Technology and Applied Materials

-0.13

Correlation Coefficient

Rubicon Technology  Applied Materials

Good diversification

The 3 months correlation between Rubicon and Applied is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Technology and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Rubicon Technology 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 Rubicon Technology 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 Rubicon Technology i.e., Rubicon Technology and Applied Materials go up and down completely randomly.

Pair Corralation between Rubicon Technology and Applied Materials

If you would invest  157.00  in Rubicon Technology on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Rubicon Technology or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Rubicon Technology  vs.  Applied Materials

Rubicon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Rubicon Technology is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Applied Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators 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 Rubicon Technology and Applied Materials

The main advantage of trading using opposite Rubicon Technology and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubicon Technology 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.

The idea behind Rubicon Technology and Applied Materials 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.