Correlation Between Actions Semiconductor and Applied Films

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

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

Diversification Opportunities for Actions Semiconductor and Applied Films

0.0

Correlation Coefficient

Actions Semiconductor  Applied Films

Pay attention - limited upside

The 3 months correlation between Actions and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Actions Semiconductor 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 Actions Semiconductor 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 Actions Semiconductor 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 Actions Semiconductor i.e., Actions Semiconductor and Applied Films go up and down completely randomly.

Pair Corralation between Actions Semiconductor and Applied Films

If you would invest (100.00) in Applied Films Corp on January 24, 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

Actions Semiconductor  vs.  Applied Films Corp

Actions Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Actions Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Actions Semiconductor is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 Actions Semiconductor and Applied Films

The main advantage of trading using opposite Actions Semiconductor and Applied Films positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actions Semiconductor 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 Actions Semiconductor 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.