Correlation Between Materialise and InterContinental
Can any of the company-specific risk be diversified away by investing in both Materialise and InterContinental 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 InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and InterContinental Hotels Group, you can compare the effects of market volatilities on Materialise and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and InterContinental.
Diversification Opportunities for Materialise and InterContinental
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Materialise and InterContinental is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Materialise i.e., Materialise and InterContinental go up and down completely randomly.
Pair Corralation between Materialise and InterContinental
Assuming the 90 days trading horizon Materialise NV is expected to generate 2.15 times more return on investment than InterContinental. However, Materialise is 2.15 times more volatile than InterContinental Hotels Group. It trades about 0.33 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.48 per unit of risk. If you would invest 555.00 in Materialise NV on September 4, 2024 and sell it today you would earn a total of 165.00 from holding Materialise NV or generate 29.73% 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. InterContinental Hotels Group
Performance |
| Timeline |
| Materialise NV |
| InterContinental Hotels |
Materialise and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and InterContinental
The main advantage of trading using opposite Materialise and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Materialise vs. Algonquin Power Utilities | Materialise vs. Geely Automobile Holdings | Materialise vs. Cars Inc | Materialise vs. CarsalesCom |
| InterContinental vs. Materialise NV | InterContinental vs. Mitsubishi Materials | InterContinental vs. VARIOUS EATERIES LS | InterContinental vs. Harmony Gold Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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