Correlation Between APPLIED MATERIALS and Komercní Banka

Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and Komercní Banka 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 Komercní Banka into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APPLIED MATERIALS and Komercn banka as, you can compare the effects of market volatilities on APPLIED MATERIALS and Komercní Banka 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 Komercní Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and Komercní Banka.

Diversification Opportunities for APPLIED MATERIALS and Komercní Banka

-0.6

Correlation Coefficient

APPLIED MATERIALS  Komercní Banka

Excellent diversification

The 3 months correlation between APPLIED and Komercní is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as 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 Komercní Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and Komercní Banka go up and down completely randomly.

Pair Corralation between APPLIED MATERIALS and Komercní Banka

Assuming the 90 days trading horizon APPLIED MATERIALS is expected to under-perform the Komercní Banka. In addition to that, APPLIED MATERIALS is 1.42 times more volatile than Komercn banka as. It trades about -0.07 of its total potential returns per unit of risk. Komercn banka as is currently generating about 0.25 per unit of volatility. If you would invest  3,346  in Komercn banka as on December 25, 2024 and sell it today you would earn a total of  1,004  from holding Komercn banka as or generate 30.01% 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.  Komercn banka as

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. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Komercn banka as

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Komercn banka as are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Komercní Banka reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with APPLIED MATERIALS and Komercní Banka

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

The idea behind APPLIED MATERIALS and Komercn banka as 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.