Correlation Between Applied Materials and ANTA Sports

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

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

Diversification Opportunities for Applied Materials and ANTA Sports

-0.15

Correlation Coefficient

Applied Materials  ANTA Sports

Good diversification

The 3 months correlation between Applied and ANTA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products 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 ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Applied Materials i.e., Applied Materials and ANTA Sports go up and down completely randomly.

Pair Corralation between Applied Materials and ANTA Sports

Assuming the 90 days horizon Applied Materials is expected to generate 0.88 times more return on investment than ANTA Sports. However, Applied Materials is 1.14 times less risky than ANTA Sports. It trades about 0.17 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.01 per unit of risk. If you would invest  12,523  in Applied Materials on April 24, 2025 and sell it today you would earn a total of  3,477  from holding Applied Materials or generate 27.76% 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.  ANTA Sports Products

Applied Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Applied Materials reported solid returns over the last few months and may actually be approaching a breakup point.

ANTA Sports Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days ANTA Sports Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANTA Sports is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Applied Materials and ANTA Sports

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

The idea behind Applied Materials and ANTA Sports Products 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.