Correlation Between Global Education and Applied Materials

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

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

Diversification Opportunities for Global Education and Applied Materials

-0.74

Correlation Coefficient

Global Education  Applied Materials

Pay attention - limited upside

The 3 months correlation between Global and Applied is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global Education Communities and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Global Education 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 Global Education Communities 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 Global Education i.e., Global Education and Applied Materials go up and down completely randomly.

Pair Corralation between Global Education and Applied Materials

Assuming the 90 days horizon Global Education Communities is expected to under-perform the Applied Materials. But the otc stock apears to be less risky and, when comparing its historical volatility, Global Education Communities is 1.16 times less risky than Applied Materials. The otc stock trades about -0.09 of its potential returns per unit of risk. The Applied Materials is currently generating about 0.3 of returns per unit of risk over similar time horizon. 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Global Education Communities  vs.  Applied Materials

Global Education Com

Risk-Adjusted Performance

Weakest

Over the last 90 days Global Education Communities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with Global Education and Applied Materials

The main advantage of trading using opposite Global Education and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Education 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 Global Education Communities 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.