Correlation Between Materialise and Aluminum
Can any of the company-specific risk be diversified away by investing in both Materialise and Aluminum 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 Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Aluminum of, you can compare the effects of market volatilities on Materialise and Aluminum 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 Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Aluminum.
Diversification Opportunities for Materialise and Aluminum
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Materialise and Aluminum is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminum 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 Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminum has no effect on the direction of Materialise i.e., Materialise and Aluminum go up and down completely randomly.
Pair Corralation between Materialise and Aluminum
Assuming the 90 days trading horizon Materialise is expected to generate 1.21 times less return on investment than Aluminum. In addition to that, Materialise is 1.08 times more volatile than Aluminum of. It trades about 0.17 of its total potential returns per unit of risk. Aluminum of is currently generating about 0.23 per unit of volatility. If you would invest 55.00 in Aluminum of on October 28, 2024 and sell it today you would earn a total of 8.00 from holding Aluminum of or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. Aluminum of
Performance |
| Timeline |
| Materialise NV |
| Aluminum |
Materialise and Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Aluminum
The main advantage of trading using opposite Materialise and Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Aluminum 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 Aluminum will offset losses from the drop in Aluminum's long position.| Materialise vs. AGF Management Limited | Materialise vs. CEOTRONICS | Materialise vs. MUTUIONLINE | Materialise vs. Gruppo Mutuionline SpA |
| Aluminum vs. ARDAGH METAL PACDL 0001 | Aluminum vs. SERI INDUSTRIAL EO | Aluminum vs. LOANDEPOT INC A | Aluminum vs. Global Ship Lease |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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