Correlation Between Materialise and DEUTSCHE BOERSE
Can any of the company-specific risk be diversified away by investing in both Materialise and DEUTSCHE BOERSE 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 DEUTSCHE BOERSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and DEUTSCHE BOERSE ADR, you can compare the effects of market volatilities on Materialise and DEUTSCHE BOERSE 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 DEUTSCHE BOERSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and DEUTSCHE BOERSE.
Diversification Opportunities for Materialise and DEUTSCHE BOERSE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Materialise and DEUTSCHE is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and DEUTSCHE BOERSE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE BOERSE ADR 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 DEUTSCHE BOERSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE BOERSE ADR has no effect on the direction of Materialise i.e., Materialise and DEUTSCHE BOERSE go up and down completely randomly.
Pair Corralation between Materialise and DEUTSCHE BOERSE
Assuming the 90 days trading horizon Materialise is expected to generate 2.43 times less return on investment than DEUTSCHE BOERSE. In addition to that, Materialise is 2.4 times more volatile than DEUTSCHE BOERSE ADR. It trades about 0.01 of its total potential returns per unit of risk. DEUTSCHE BOERSE ADR is currently generating about 0.06 per unit of volatility. If you would invest 1,529 in DEUTSCHE BOERSE ADR on September 13, 2024 and sell it today you would earn a total of 651.00 from holding DEUTSCHE BOERSE ADR or generate 42.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. DEUTSCHE BOERSE ADR
Performance |
| Timeline |
| Materialise NV |
| DEUTSCHE BOERSE ADR |
Materialise and DEUTSCHE BOERSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and DEUTSCHE BOERSE
The main advantage of trading using opposite Materialise and DEUTSCHE BOERSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, DEUTSCHE BOERSE 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 DEUTSCHE BOERSE will offset losses from the drop in DEUTSCHE BOERSE's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
| DEUTSCHE BOERSE vs. CEOTRONICS | DEUTSCHE BOERSE vs. VULCAN MATERIALS | DEUTSCHE BOERSE vs. NEWELL RUBBERMAID | DEUTSCHE BOERSE vs. Materialise NV |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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