Correlation Between Barclays PLC and Applied Materials,

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Can any of the company-specific risk be diversified away by investing in both Barclays PLC 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 Barclays PLC and Applied Materials, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC and Applied Materials,, you can compare the effects of market volatilities on Barclays PLC 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 Barclays PLC with a short position of Applied Materials,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and Applied Materials,.

Diversification Opportunities for Barclays PLC and Applied Materials,

BarclaysAppliedDiversified AwayBarclaysAppliedDiversified Away100%
0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Barclays and Applied is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, and Barclays PLC 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 Barclays PLC 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 Barclays PLC i.e., Barclays PLC and Applied Materials, go up and down completely randomly.

Pair Corralation between Barclays PLC and Applied Materials,

Assuming the 90 days trading horizon Barclays PLC is expected to generate 1.26 times more return on investment than Applied Materials,. However, Barclays PLC is 1.26 times more volatile than Applied Materials,. It trades about 0.0 of its potential returns per unit of risk. Applied Materials, is currently generating about -0.2 per unit of risk. If you would invest  8,660  in Barclays PLC on November 18, 2024 and sell it today you would lose (210.00) from holding Barclays PLC or give up 2.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Barclays PLC  vs.  Applied Materials,

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-5051015
JavaScript chart by amCharts 3.21.15B1CS34 A1MT34
       Timeline  
Barclays PLC 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Barclays PLC sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7580859095100
Applied Materials, 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Applied Materials, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb100105110115120

Barclays PLC and Applied Materials, Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.15-7.6-5.05-2.51-0.04252.555.187.8210.4613.09 0.0150.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15B1CS34 A1MT34
       Returns  

Pair Trading with Barclays PLC and Applied Materials,

The main advantage of trading using opposite Barclays PLC and Applied Materials, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC 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,'s long position.
The idea behind Barclays PLC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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