Correlation Between Materialise and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both Materialise and Grand Canyon 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 Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Grand Canyon Education, you can compare the effects of market volatilities on Materialise and Grand Canyon 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 Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Grand Canyon.
Diversification Opportunities for Materialise and Grand Canyon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Materialise and Grand is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Materialise i.e., Materialise and Grand Canyon go up and down completely randomly.
Pair Corralation between Materialise and Grand Canyon
Assuming the 90 days trading horizon Materialise is expected to generate 1.3 times less return on investment than Grand Canyon. In addition to that, Materialise is 1.06 times more volatile than Grand Canyon Education. It trades about 0.21 of its total potential returns per unit of risk. Grand Canyon Education is currently generating about 0.29 per unit of volatility. If you would invest 12,200 in Grand Canyon Education on August 30, 2024 and sell it today you would earn a total of 3,200 from holding Grand Canyon Education or generate 26.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. Grand Canyon Education
Performance |
| Timeline |
| Materialise NV |
| Grand Canyon Education |
Materialise and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Grand Canyon
The main advantage of trading using opposite Materialise and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| Materialise vs. Elmos Semiconductor SE | Materialise vs. Lendlease Group | Materialise vs. Magnachip Semiconductor | Materialise vs. Air Lease |
| Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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