Correlation Between APPLIED MATERIALS and FORTRESS BIOTECHPRFA

Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between APPLIED MATERIALS and FORTRESS BIOTECHPRFA 25, you can compare the effects of market volatilities on APPLIED MATERIALS and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and FORTRESS BIOTECHPRFA.

Diversification Opportunities for APPLIED MATERIALS and FORTRESS BIOTECHPRFA

0.61

Correlation Coefficient

APPLIED MATERIALS  FORTRESS BIOTECHPRFA

Poor diversification

The 3 months correlation between APPLIED and FORTRESS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and FORTRESS BIOTECHPRFA 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTRESS BIOTECHPRFA has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and FORTRESS BIOTECHPRFA go up and down completely randomly.

Pair Corralation between APPLIED MATERIALS and FORTRESS BIOTECHPRFA

Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 0.46 times more return on investment than FORTRESS BIOTECHPRFA. However, APPLIED MATERIALS is 2.16 times less risky than FORTRESS BIOTECHPRFA. It trades about 0.22 of its potential returns per unit of risk. FORTRESS BIOTECHPRFA 25 is currently generating about 0.1 per unit of risk. If you would invest  12,026  in APPLIED MATERIALS on April 20, 2025 and sell it today you would earn a total of  4,344  from holding APPLIED MATERIALS or generate 36.12% return on investment over 90 days.

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

APPLIED MATERIALS  vs.  FORTRESS BIOTECHPRFA 25

APPLIED MATERIALS

Risk-Adjusted Performance

Solid

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. In spite of comparatively uncertain basic indicators, APPLIED MATERIALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

FORTRESS BIOTECHPRFA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FORTRESS BIOTECHPRFA 25 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, FORTRESS BIOTECHPRFA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with APPLIED MATERIALS and FORTRESS BIOTECHPRFA

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

The idea behind APPLIED MATERIALS and FORTRESS BIOTECHPRFA 25 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.