Correlation Between Materialise and GLOBUS MEDICAL-A
Can any of the company-specific risk be diversified away by investing in both Materialise and GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and GLOBUS MEDICAL A, you can compare the effects of market volatilities on Materialise and GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and GLOBUS MEDICAL-A.
Diversification Opportunities for Materialise and GLOBUS MEDICAL-A
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Materialise and GLOBUS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of Materialise i.e., Materialise and GLOBUS MEDICAL-A go up and down completely randomly.
Pair Corralation between Materialise and GLOBUS MEDICAL-A
Assuming the 90 days trading horizon Materialise is expected to generate 9.77 times less return on investment than GLOBUS MEDICAL-A. In addition to that, Materialise is 1.56 times more volatile than GLOBUS MEDICAL A. It trades about 0.0 of its total potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about 0.03 per unit of volatility. If you would invest 6,650 in GLOBUS MEDICAL A on October 11, 2024 and sell it today you would earn a total of 1,400 from holding GLOBUS MEDICAL A or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. GLOBUS MEDICAL A
Performance |
| Timeline |
| Materialise NV |
| GLOBUS MEDICAL A |
Materialise and GLOBUS MEDICAL-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and GLOBUS MEDICAL-A
The main advantage of trading using opposite Materialise and GLOBUS MEDICAL-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A will offset losses from the drop in GLOBUS MEDICAL-A's long position.| Materialise vs. FEMALE HEALTH | Materialise vs. GEAR4MUSIC LS 10 | Materialise vs. ALERION CLEANPOWER | Materialise vs. CLEAN ENERGY FUELS |
| GLOBUS MEDICAL-A vs. Materialise NV | GLOBUS MEDICAL-A vs. Martin Marietta Materials | GLOBUS MEDICAL-A vs. Air Lease | GLOBUS MEDICAL-A vs. Vulcan Materials |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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