Correlation Between Materialise and Geratherm Medical
Can any of the company-specific risk be diversified away by investing in both Materialise and Geratherm Medical 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 Geratherm Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Geratherm Medical AG, you can compare the effects of market volatilities on Materialise and Geratherm Medical 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 Geratherm Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Geratherm Medical.
Diversification Opportunities for Materialise and Geratherm Medical
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Materialise and Geratherm is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Geratherm Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geratherm Medical 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 Geratherm Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geratherm Medical has no effect on the direction of Materialise i.e., Materialise and Geratherm Medical go up and down completely randomly.
Pair Corralation between Materialise and Geratherm Medical
Assuming the 90 days trading horizon Materialise NV is expected to generate 0.83 times more return on investment than Geratherm Medical. However, Materialise NV is 1.21 times less risky than Geratherm Medical. It trades about 0.0 of its potential returns per unit of risk. Geratherm Medical AG is currently generating about -0.02 per unit of risk. If you would invest 785.00 in Materialise NV on August 30, 2024 and sell it today you would lose (95.00) from holding Materialise NV or give up 12.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Materialise NV vs. Geratherm Medical AG
Performance |
| Timeline |
| Materialise NV |
| Geratherm Medical |
Materialise and Geratherm Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Geratherm Medical
The main advantage of trading using opposite Materialise and Geratherm Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Geratherm Medical 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 Geratherm Medical will offset losses from the drop in Geratherm Medical's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
| Geratherm Medical vs. Abbott Laboratories | Geratherm Medical vs. Medtronic PLC | Geratherm Medical vs. Stryker | Geratherm Medical vs. Boston Scientific |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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