Correlation Between Energisa and Applied Materials,

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

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

Diversification Opportunities for Energisa and Applied Materials,

-0.06

Correlation Coefficient

Energisa  Applied Materials,

Good diversification

The 3 months correlation between Energisa and Applied is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, and Energisa 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 Energisa SA 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 Energisa i.e., Energisa and Applied Materials, go up and down completely randomly.

Pair Corralation between Energisa and Applied Materials,

Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Applied Materials,. But the stock apears to be less risky and, when comparing its historical volatility, Energisa SA is 1.8 times less risky than Applied Materials,. The stock trades about -0.02 of its potential returns per unit of risk. The Applied Materials, is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  10,400  in Applied Materials, on October 24, 2024 and sell it today you would earn a total of  1,304  from holding Applied Materials, or generate 12.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Energisa SA  vs.  Applied Materials,

Energisa SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Applied Materials,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Applied Materials, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energisa and Applied Materials,

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

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.