Correlation Between Materialise and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Materialise and Algonquin Power 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 Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Algonquin Power Utilities, you can compare the effects of market volatilities on Materialise and Algonquin Power 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 Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Algonquin Power.
Diversification Opportunities for Materialise and Algonquin Power
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Materialise and Algonquin is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities 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 Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Materialise i.e., Materialise and Algonquin Power go up and down completely randomly.
Pair Corralation between Materialise and Algonquin Power
Assuming the 90 days trading horizon Materialise NV is expected to generate 1.58 times more return on investment than Algonquin Power. However, Materialise is 1.58 times more volatile than Algonquin Power Utilities. It trades about 0.0 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.02 per unit of risk. If you would invest 868.00 in Materialise NV on September 5, 2024 and sell it today you would lose (148.00) from holding Materialise NV or give up 17.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Materialise NV vs. Algonquin Power Utilities
Performance |
| Timeline |
| Materialise NV |
| Algonquin Power Utilities |
Materialise and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Algonquin Power
The main advantage of trading using opposite Materialise and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| Materialise vs. Warner Music Group | Materialise vs. Meli Hotels International | Materialise vs. VARIOUS EATERIES LS | Materialise vs. Host Hotels Resorts |
| Algonquin Power vs. Superior Plus Corp | Algonquin Power vs. NMI Holdings | Algonquin Power vs. Origin Agritech | Algonquin Power vs. SIVERS SEMICONDUCTORS AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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