Correlation Between Materialise and Identiv
Can any of the company-specific risk be diversified away by investing in both Materialise and Identiv 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 Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Identiv, you can compare the effects of market volatilities on Materialise and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Identiv.
Diversification Opportunities for Materialise and Identiv
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Materialise and Identiv is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Materialise i.e., Materialise and Identiv go up and down completely randomly.
Pair Corralation between Materialise and Identiv
Assuming the 90 days trading horizon Materialise NV is expected to generate 1.33 times more return on investment than Identiv. However, Materialise is 1.33 times more volatile than Identiv. It trades about 0.17 of its potential returns per unit of risk. Identiv is currently generating about 0.12 per unit of risk. If you would invest 476.00 in Materialise NV on September 2, 2024 and sell it today you would earn a total of 209.00 from holding Materialise NV or generate 43.91% 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. Identiv
Performance |
| Timeline |
| Materialise NV |
| Identiv |
Materialise and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Identiv
The main advantage of trading using opposite Materialise and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
| Identiv vs. SBA Communications Corp | Identiv vs. Verizon Communications | Identiv vs. Iridium Communications | Identiv vs. THORNEY TECHS LTD |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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