Applied Materials (Germany) Volatility

Volatility Strategy

Main indicators related to Applied Materials' market risk premium analysis include:

Moving together with Applied Stock

Moving against Applied Stock

Sensitivity To Market

3 Months Beta |Analyze Applied Materials Demand TrendCheck current 90 days Applied Materials correlation with market (Dow Jones Industrial)

Downside Risk

Standard Deviation

3.63

Stock Volatility Analysis

Projected Return Density Against Market

Assuming a 90-day horizon Applied Materials has a beta of -0.2551 . This suggests that as returns on the benchmark increase, returns on Applied Materials tend to move in the opposite direction, though by a smaller magnitude. During a bear market, however, Applied Materials is likely to outperform the market. Applied Materials has an alpha of 0.4004, implying that it can generate a 0.4004 percent excess return over Dow Jones Industrial after adjusting for the inherent market risk (beta). Applied Materials' volatility is measured either by using standard deviation or beta. Standard deviation reflects how much Applied Materials' price typically deviates from the mean over a given period.

What Drives Applied Materials' Price Volatility?

Several factors can influence Applied Materials' market volatility:

Industry Dynamics

Sector-level events can directly affect Applied Materials' price stability. Regulatory changes, supply disruptions, or shifts in demand within Applied Materials' industry may create volatility even when the broader market is calm. Competitive dynamics and industry consolidation can also amplify price swings for companies like Applied Materials.

Political and Economic Environment

Macroeconomic conditions and policy decisions shape the backdrop for Applied Materials' price movements. Interest rate changes, trade policy shifts, and fiscal legislation can all alter investor sentiment toward Applied Materials. During periods of economic expansion, Applied Materials' price tends to benefit from broader market optimism, while downturns can amplify selling pressure.

Applied Materials' Company-Specific Factors

Volatility can also stem from events unique to Applied Materials. Earnings surprises, management changes, product launches, or legal developments may trigger sharp price reactions in Applied Materials' stock. Conversely, operational setbacks, guidance revisions, or data breaches can weigh on Applied Materials' share price.

Stock Risk Measures

Stock Return Volatility

Applied Materials historical daily return volatility represents how much of Applied Materials stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company reported 3.634% volatility on return distribution over a 90-day investment horizon. By contrast, Dow Jones Industrial has volatility of 0.7886% on return distribution over a 90-day investment horizon.

Related Correlations Analysis

Looking at additional risk metrics for Applied Materials helps investors judge how the position may behave under different market and portfolio conditions. A disciplined risk review helps investors decide whether exposure should be maintained, reduced, or offset elsewhere in the portfolio.

Pair trading with Applied Materials can help investors hedge some company-specific exposure by balancing a long view with an offsetting position. The advantage is that adverse movement in one leg may be partly offset by the other when correlation and thesis alignment hold.

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Applied Materials as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Applied Materials' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Applied Materials' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Applied Materials.