Correlation Between Applied Materials and Applovin Corp

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

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

Diversification Opportunities for Applied Materials and Applovin Corp

0.12

Correlation Coefficient

Applied Materials  Applovin Corp

Average diversification

The 3 months correlation between Applied and Applovin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Applovin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applovin Corp 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 Applovin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applovin Corp has no effect on the direction of Applied Materials i.e., Applied Materials and Applovin Corp go up and down completely randomly.

Pair Corralation between Applied Materials and Applovin Corp

Given the investment horizon of 90 days Applied Materials is expected to generate 0.74 times more return on investment than Applovin Corp. However, Applied Materials is 1.35 times less risky than Applovin Corp. It trades about 0.3 of its potential returns per unit of risk. Applovin Corp is currently generating about 0.12 per unit of risk. If you would invest  16,173  in Applied Materials on September 8, 2025 and sell it today you would earn a total of  10,627  from holding Applied Materials or generate 65.71% return on investment over 90 days.

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

Applied Materials  vs.  Applovin Corp

Applied Materials

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Applied Materials unveiled solid returns over the last few months and may actually be approaching a breakup point.

Applovin Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Applovin Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Applovin Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Materials and Applovin Corp

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

The idea behind Applied Materials and Applovin Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.