Correlation Between Advanced Analogic and Applied Films

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

By analyzing existing cross correlation between Advanced Analogic Technologies and Applied Films Corp, you can compare the effects of market volatilities on Advanced Analogic and Applied Films 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 Advanced Analogic with a short position of Applied Films. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Analogic and Applied Films.

Diversification Opportunities for Advanced Analogic and Applied Films

0.0

Correlation Coefficient

Advanced Analogic  Applied Films

Pay attention - limited upside

The 3 months correlation between Advanced and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Analogic Technologies and Applied Films Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Films Corp and Advanced Analogic 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 Advanced Analogic Technologies are associated (or correlated) with Applied Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Films Corp has no effect on the direction of Advanced Analogic i.e., Advanced Analogic and Applied Films go up and down completely randomly.

Pair Corralation between Advanced Analogic and Applied Films

If you would invest (100.00) in Applied Films Corp on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Applied Films Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Advanced Analogic Technologies  vs.  Applied Films Corp

Advanced Analogic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Analogic Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Advanced Analogic is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Applied Films Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Films Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Applied Films is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advanced Analogic and Applied Films

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

The idea behind Advanced Analogic Technologies and Applied Films 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.