Correlation Between Applied Materials and CITY OFFICE
Can any of the company-specific risk be diversified away by investing in both Applied Materials and CITY OFFICE 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 CITY OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and CITY OFFICE REIT, you can compare the effects of market volatilities on Applied Materials and CITY OFFICE 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 CITY OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and CITY OFFICE.
Diversification Opportunities for Applied Materials and CITY OFFICE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and CITY is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and CITY OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITY OFFICE REIT 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 CITY OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITY OFFICE REIT has no effect on the direction of Applied Materials i.e., Applied Materials and CITY OFFICE go up and down completely randomly.
Pair Corralation between Applied Materials and CITY OFFICE
Assuming the 90 days horizon Applied Materials is expected to generate 6.72 times more return on investment than CITY OFFICE. However, Applied Materials is 6.72 times more volatile than CITY OFFICE REIT. It trades about 0.15 of its potential returns per unit of risk. CITY OFFICE REIT is currently generating about -0.11 per unit of risk. If you would invest 15,209 in Applied Materials on July 7, 2025 and sell it today you would earn a total of 3,255 from holding Applied Materials or generate 21.4% 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. CITY OFFICE REIT
Performance |
| Timeline |
| Applied Materials |
| CITY OFFICE REIT |
Applied Materials and CITY OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and CITY OFFICE
The main advantage of trading using opposite Applied Materials and CITY OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials position performs unexpectedly, CITY OFFICE 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 CITY OFFICE will offset losses from the drop in CITY OFFICE's long position.| Applied Materials vs. GAMESTOP | Applied Materials vs. CSSC Offshore Marine | Applied Materials vs. Penn National Gaming | Applied Materials vs. TEN SQUARE GAMES |
| CITY OFFICE vs. Boston Properties | CITY OFFICE vs. Great Portland Estates | CITY OFFICE vs. Easterly Government Properties | CITY OFFICE vs. Office Properties Income |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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