Correlation Between PHX Energy and Applied Materials,

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

By analyzing existing cross correlation between PHX Energy Services and Applied Materials,, you can compare the effects of market volatilities on PHX Energy 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 PHX Energy with a short position of Applied Materials,. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Energy and Applied Materials,.

Diversification Opportunities for PHX Energy and Applied Materials,

0.79

Correlation Coefficient

PHX Energy  Applied Materials,

Poor diversification

The 3 months correlation between PHX and Applied is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PHX Energy Services and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, and PHX Energy 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 PHX Energy Services 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 PHX Energy i.e., PHX Energy and Applied Materials, go up and down completely randomly.

Pair Corralation between PHX Energy and Applied Materials,

Assuming the 90 days trading horizon PHX Energy is expected to generate 2.91 times less return on investment than Applied Materials,. But when comparing it to its historical volatility, PHX Energy Services is 1.43 times less risky than Applied Materials,. It trades about 0.12 of its potential returns per unit of risk. Applied Materials, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,552  in Applied Materials, on April 21, 2025 and sell it today you would earn a total of  619.00  from holding Applied Materials, or generate 39.88% return on investment over 90 days.

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

PHX Energy Services  vs.  Applied Materials,

PHX Energy Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PHX Energy Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, PHX Energy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with PHX Energy and Applied Materials,

The main advantage of trading using opposite PHX Energy and Applied Materials, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHX Energy 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,'s long position.

The idea behind PHX Energy Services 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.