Correlation Between Precious Metals and Applied Materials,

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

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

Diversification Opportunities for Precious Metals and Applied Materials,

0.6

Correlation Coefficient

Precious Metals  Applied Materials,

Poor diversification

The 3 months correlation between Precious and Applied is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, and Precious Metals 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 Precious Metals And 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 Precious Metals i.e., Precious Metals and Applied Materials, go up and down completely randomly.

Pair Corralation between Precious Metals and Applied Materials,

Assuming the 90 days trading horizon Precious Metals is expected to generate 3.41 times less return on investment than Applied Materials,. But when comparing it to its historical volatility, Precious Metals And is 1.34 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 0.3 of returns per unit of risk over similar time horizon. If you would invest  1,836  in Applied Materials, on September 6, 2025 and sell it today you would earn a total of  1,207  from holding Applied Materials, or generate 65.74% return on investment over 90 days.

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

Precious Metals And  vs.  Applied Materials,

Precious Metals And

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Precious Metals sustained solid returns over the last few months and may actually be approaching a breakup point.

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 rather unfluctuating technical and fundamental indicators, Applied Materials, exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Precious Metals and Applied Materials,

The main advantage of trading using opposite Precious Metals and Applied Materials, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Metals 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,'s long position.

The idea behind Precious Metals And 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.