Correlation Between Applied Materials, and First Hydrogen

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

By analyzing existing cross correlation between Applied Materials, and First Hydrogen Corp, you can compare the effects of market volatilities on Applied Materials, and First Hydrogen 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 First Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials, and First Hydrogen.

Diversification Opportunities for Applied Materials, and First Hydrogen

0.55

Correlation Coefficient

Applied Materials,  First Hydrogen

Very weak diversification

The 3 months correlation between Applied and First is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials, and First Hydrogen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hydrogen Corp 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 First Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hydrogen Corp has no effect on the direction of Applied Materials, i.e., Applied Materials, and First Hydrogen go up and down completely randomly.

Pair Corralation between Applied Materials, and First Hydrogen

Assuming the 90 days trading horizon Applied Materials, is expected to generate 2.19 times less return on investment than First Hydrogen. But when comparing it to its historical volatility, Applied Materials, is 3.86 times less risky than First Hydrogen. It trades about 0.25 of its potential returns per unit of risk. First Hydrogen Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  42.00  in First Hydrogen Corp on April 21, 2025 and sell it today you would earn a total of  30.00  from holding First Hydrogen Corp or generate 71.43% return on investment over 90 days.

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

Applied Materials,  vs.  First Hydrogen Corp

Applied Materials,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials, are ranked lower than 19 (%) 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.

First Hydrogen Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Hydrogen Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, First Hydrogen showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Materials, and First Hydrogen

The main advantage of trading using opposite Applied Materials, and First Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials, position performs unexpectedly, First Hydrogen 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 First Hydrogen will offset losses from the drop in First Hydrogen's long position.

The idea behind Applied Materials, and First Hydrogen Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.