Correlation Between Applied Materials, and MAHLE Metal

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

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

Diversification Opportunities for Applied Materials, and MAHLE Metal

-0.71

Correlation Coefficient

Applied Materials,  MAHLE Metal

Pay attention - limited upside

The 3 months correlation between Applied and MAHLE is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials, and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve and Applied Materials, 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 Applied Materials, are associated (or correlated) with MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Applied Materials, i.e., Applied Materials, and MAHLE Metal go up and down completely randomly.

Pair Corralation between Applied Materials, and MAHLE Metal

Assuming the 90 days trading horizon Applied Materials, is expected to under-perform the MAHLE Metal. In addition to that, Applied Materials, is 1.84 times more volatile than MAHLE Metal Leve. It trades about -0.1 of its total potential returns per unit of risk. MAHLE Metal Leve is currently generating about 0.08 per unit of volatility. If you would invest  2,727  in MAHLE Metal Leve on December 24, 2024 and sell it today you would earn a total of  181.00  from holding MAHLE Metal Leve or generate 6.64% return on investment over 90 days.

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

Applied Materials,  vs.  MAHLE Metal Leve

Applied Materials,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applied Materials, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MAHLE Metal Leve

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MAHLE Metal Leve are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MAHLE Metal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Applied Materials, and MAHLE Metal

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

The idea behind Applied Materials, and MAHLE Metal Leve 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 Positions Ratings module to 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.