Correlation Between Materialise and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both Materialise and CapitaLand Investment 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 Materialise and CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and CapitaLand Investment Limited, you can compare the effects of market volatilities on Materialise and CapitaLand Investment 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 Materialise with a short position of CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and CapitaLand Investment.
Diversification Opportunities for Materialise and CapitaLand Investment
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Materialise and CapitaLand is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment and Materialise 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 Materialise NV are associated (or correlated) with CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of Materialise i.e., Materialise and CapitaLand Investment go up and down completely randomly.
Pair Corralation between Materialise and CapitaLand Investment
Assuming the 90 days trading horizon Materialise NV is expected to generate 3.63 times more return on investment than CapitaLand Investment. However, Materialise is 3.63 times more volatile than CapitaLand Investment Limited. It trades about 0.19 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.16 per unit of risk. If you would invest 650.00 in Materialise NV on September 13, 2024 and sell it today you would earn a total of 110.00 from holding Materialise NV or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. CapitaLand Investment Limited
Performance |
| Timeline |
| Materialise NV |
| CapitaLand Investment |
Materialise and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and CapitaLand Investment
The main advantage of trading using opposite Materialise and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
| CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. SIVERS SEMICONDUCTORS AB | CapitaLand Investment vs. Reliance Steel Aluminum | CapitaLand Investment vs. CHINA HUARONG ENERHD 50 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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