Correlation Between APPLIED MATERIALS and Easy Software

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

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

Diversification Opportunities for APPLIED MATERIALS and Easy Software

0.62

Correlation Coefficient

APPLIED MATERIALS  Easy Software

Poor diversification

The 3 months correlation between APPLIED and Easy is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG 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 Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of APPLIED MATERIALS i.e., APPLIED MATERIALS and Easy Software go up and down completely randomly.

Pair Corralation between APPLIED MATERIALS and Easy Software

Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 0.96 times more return on investment than Easy Software. However, APPLIED MATERIALS is 1.05 times less risky than Easy Software. It trades about 0.15 of its potential returns per unit of risk. Easy Software AG is currently generating about 0.06 per unit of risk. If you would invest  13,099  in APPLIED MATERIALS on April 24, 2025 and sell it today you would earn a total of  2,823  from holding APPLIED MATERIALS or generate 21.55% 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.  Easy Software AG

APPLIED MATERIALS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in APPLIED MATERIALS are ranked lower than 11 (%) 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.

Easy Software AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Easy Software AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Easy Software may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with APPLIED MATERIALS and Easy Software

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

The idea behind APPLIED MATERIALS and Easy Software AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.