Correlation Between FEMALE HEALTH and APPLIED MATERIALS

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

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

Diversification Opportunities for FEMALE HEALTH and APPLIED MATERIALS

0.66

Correlation Coefficient

FEMALE HEALTH  APPLIED MATERIALS

Poor diversification

The 3 months correlation between FEMALE and APPLIED is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and APPLIED MATERIALS go up and down completely randomly.

Pair Corralation between FEMALE HEALTH and APPLIED MATERIALS

Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 3.37 times more return on investment than APPLIED MATERIALS. However, FEMALE HEALTH is 3.37 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 -0.08 per unit of risk. If you would invest  64.00  in FEMALE HEALTH on December 30, 2024 and sell it today you would lose (15.00) from holding FEMALE HEALTH or give up 23.44% of portfolio value over 90 days.

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

FEMALE HEALTH  vs.  APPLIED MATERIALS

FEMALE HEALTH

Risk-Adjusted Performance

Very Weak

Over the last 90 days FEMALE HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FEMALE HEALTH is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with FEMALE HEALTH and APPLIED MATERIALS

The main advantage of trading using opposite FEMALE HEALTH and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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 FEMALE HEALTH 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.