Correlation Between Hong Kong and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Applied Materials, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Applied Materials.
Diversification Opportunities for Hong Kong and Applied Materials
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hong and Applied is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Applied Materials go up and down completely randomly.
Pair Corralation between Hong Kong and Applied Materials
Assuming the 90 days trading horizon Hong Kong Land is expected to generate 0.12 times more return on investment than Applied Materials. However, Hong Kong Land is 8.17 times less risky than Applied Materials. It trades about 0.12 of its potential returns per unit of risk. Applied Materials is currently generating about -0.06 per unit of risk. If you would invest 724.00 in Hong Kong Land on December 30, 2024 and sell it today you would earn a total of 17.00 from holding Hong Kong Land or generate 2.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hong Kong Land vs. Applied Materials
Performance |
Timeline |
Hong Kong Land |
Applied Materials |
Hong Kong and Applied Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hong Kong and Applied Materials
The main advantage of trading using opposite Hong Kong and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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' long position.Hong Kong vs. AMG Advanced Metallurgical | Hong Kong vs. International Consolidated Airlines | Hong Kong vs. Solstad Offshore ASA | Hong Kong vs. Check Point Software |
Applied Materials vs. One Media iP | Applied Materials vs. Resolute Mining Limited | Applied Materials vs. Atresmedia | Applied Materials vs. Grand Vision Media |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Positions Ratings 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 |