Correlation Between Materialise and VALE N1
Can any of the company-specific risk be diversified away by investing in both Materialise and VALE N1 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 VALE N1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and VALE N1, you can compare the effects of market volatilities on Materialise and VALE N1 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 VALE N1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and VALE N1.
Diversification Opportunities for Materialise and VALE N1
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Materialise and VALE is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and VALE N1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VALE N1 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 VALE N1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VALE N1 has no effect on the direction of Materialise i.e., Materialise and VALE N1 go up and down completely randomly.
Pair Corralation between Materialise and VALE N1
Assuming the 90 days trading horizon Materialise NV is expected to generate 2.56 times more return on investment than VALE N1. However, Materialise is 2.56 times more volatile than VALE N1. It trades about 0.21 of its potential returns per unit of risk. VALE N1 is currently generating about -0.17 per unit of risk. If you would invest 486.00 in Materialise NV on August 30, 2024 and sell it today you would earn a total of 204.00 from holding Materialise NV or generate 41.98% 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. VALE N1
Performance |
| Timeline |
| Materialise NV |
| VALE N1 |
Materialise and VALE N1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and VALE N1
The main advantage of trading using opposite Materialise and VALE N1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, VALE N1 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 VALE N1 will offset losses from the drop in VALE N1's long position.| Materialise vs. Elmos Semiconductor SE | Materialise vs. Lendlease Group | Materialise vs. Magnachip Semiconductor | Materialise vs. Air Lease |
| VALE N1 vs. Universal Entertainment | VALE N1 vs. Norwegian Air Shuttle | VALE N1 vs. CNVISION MEDIA | VALE N1 vs. MYFAIR GOLD P |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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