Correlation Between International Consolidated and Applied Materials
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Applied Materials, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Applied Materials.
Diversification Opportunities for International Consolidated and Applied Materials
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Applied is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and Applied Materials go up and down completely randomly.
Pair Corralation between International Consolidated and Applied Materials
Assuming the 90 days horizon International Consolidated Airlines is expected to under-perform the Applied Materials. But the pink sheet apears to be less risky and, when comparing its historical volatility, International Consolidated Airlines is 1.4 times less risky than Applied Materials. The pink sheet trades about -0.01 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 7, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Applied Materials
Performance |
| Timeline |
| International Consolidated |
| Applied Materials |
International Consolidated and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Applied Materials
The main advantage of trading using opposite International Consolidated and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Telkom Indonesia Tbk | International Consolidated vs. PT Bank Rakyat | International Consolidated vs. Bank Rakyat | International Consolidated vs. Astra International Tbk |
| Applied Materials vs. Delaware Investments Florida | Applied Materials vs. BCP Investment Corp | Applied Materials vs. Spirent Communications plc | Applied Materials vs. Shenzhen Investment Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |