Correlation Between Materialise and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both Materialise and DICKS Sporting 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 DICKS Sporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and DICKS Sporting Goods, you can compare the effects of market volatilities on Materialise and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and DICKS Sporting.
Diversification Opportunities for Materialise and DICKS Sporting
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Materialise and DICKS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of Materialise i.e., Materialise and DICKS Sporting go up and down completely randomly.
Pair Corralation between Materialise and DICKS Sporting
Assuming the 90 days trading horizon Materialise NV is expected to generate 1.29 times more return on investment than DICKS Sporting. However, Materialise is 1.29 times more volatile than DICKS Sporting Goods. It trades about 0.24 of its potential returns per unit of risk. DICKS Sporting Goods is currently generating about 0.2 per unit of risk. If you would invest 565.00 in Materialise NV on August 31, 2024 and sell it today you would earn a total of 120.00 from holding Materialise NV or generate 21.24% 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. DICKS Sporting Goods
Performance |
| Timeline |
| Materialise NV |
| DICKS Sporting Goods |
Materialise and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and DICKS Sporting
The main advantage of trading using opposite Materialise and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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