Correlation Between Advantest Corp and Applied Materials

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

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

Diversification Opportunities for Advantest Corp and Applied Materials

0.0

Correlation Coefficient

Advantest Corp  Applied Materials

Pay attention - limited upside

The 3 months correlation between Advantest and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advantest Corp DRC and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Advantest Corp 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 Advantest Corp DRC 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 Advantest Corp i.e., Advantest Corp and Applied Materials go up and down completely randomly.

Pair Corralation between Advantest Corp and Applied Materials

If you would invest  17,254  in Applied Materials on May 13, 2025 and sell it today you would earn a total of  1,184  from holding Applied Materials or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Advantest Corp DRC  vs.  Applied Materials

Advantest Corp DRC

Risk-Adjusted Performance

Weakest

Over the last 90 days Advantest Corp DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Advantest Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Applied Materials

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Applied Materials may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Advantest Corp and Applied Materials

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

The idea behind Advantest Corp DRC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.