Correlation Between Applied Materials and Intuit

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

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

Diversification Opportunities for Applied Materials and Intuit

-0.22

Correlation Coefficient

Applied Materials  Intuit

Very good diversification

The 3 months correlation between Applied and Intuit is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc 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 Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Applied Materials i.e., Applied Materials and Intuit go up and down completely randomly.

Pair Corralation between Applied Materials and Intuit

Given the investment horizon of 90 days Applied Materials is expected to generate 2.3 times more return on investment than Intuit. However, Applied Materials is 2.3 times more volatile than Intuit Inc. It trades about 0.12 of its potential returns per unit of risk. Intuit Inc is currently generating about -0.08 per unit of risk. If you would invest  18,770  in Applied Materials on August 14, 2025 and sell it today you would earn a total of  4,303  from holding Applied Materials or generate 22.92% return on investment over 90 days.

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

Applied Materials  vs.  Intuit Inc

Applied Materials

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Applied Materials unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intuit Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Applied Materials and Intuit

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

The idea behind Applied Materials and Intuit Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.