Correlation Between CRISPR Therapeutics and Applied Materials

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CRISPR Therapeutics 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 CRISPR Therapeutics and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRISPR Therapeutics AG and Applied Materials, you can compare the effects of market volatilities on CRISPR Therapeutics 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 CRISPR Therapeutics with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRISPR Therapeutics and Applied Materials.

Diversification Opportunities for CRISPR Therapeutics and Applied Materials

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between CRISPR and Applied is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CRISPR Therapeutics AG and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and CRISPR Therapeutics 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 CRISPR Therapeutics AG 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 CRISPR Therapeutics i.e., CRISPR Therapeutics and Applied Materials go up and down completely randomly.

Pair Corralation between CRISPR Therapeutics and Applied Materials

Assuming the 90 days trading horizon CRISPR Therapeutics AG is expected to generate 1.76 times more return on investment than Applied Materials. However, CRISPR Therapeutics is 1.76 times more volatile than Applied Materials. It trades about 0.13 of its potential returns per unit of risk. Applied Materials is currently generating about 0.22 per unit of risk. If you would invest  4,080  in CRISPR Therapeutics AG on April 21, 2025 and sell it today you would earn a total of  1,470  from holding CRISPR Therapeutics AG or generate 36.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CRISPR Therapeutics AG  vs.  Applied Materials

 Performance 
       Timeline  
CRISPR Therapeutics 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CRISPR Therapeutics AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CRISPR Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.
Applied Materials 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Applied Materials reported solid returns over the last few months and may actually be approaching a breakup point.

CRISPR Therapeutics and Applied Materials Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CRISPR Therapeutics and Applied Materials

The main advantage of trading using opposite CRISPR Therapeutics and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRISPR Therapeutics 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 CRISPR Therapeutics AG 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.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon