Correlation Between Materialise and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Materialise and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Materialise and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and IMPERIAL TOBACCO.
Diversification Opportunities for Materialise and IMPERIAL TOBACCO
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Materialise and IMPERIAL is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Materialise i.e., Materialise and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Materialise and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Materialise is expected to generate 2.83 times less return on investment than IMPERIAL TOBACCO. In addition to that, Materialise is 2.75 times more volatile than IMPERIAL TOBACCO . It trades about 0.01 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.08 per unit of volatility. If you would invest 2,051 in IMPERIAL TOBACCO on September 13, 2024 and sell it today you would earn a total of 1,102 from holding IMPERIAL TOBACCO or generate 53.73% 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. IMPERIAL TOBACCO
Performance |
| Timeline |
| Materialise NV |
| IMPERIAL TOBACCO |
Materialise and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and IMPERIAL TOBACCO
The main advantage of trading using opposite Materialise and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
| IMPERIAL TOBACCO vs. SLR Investment Corp | IMPERIAL TOBACCO vs. CyberArk Software | IMPERIAL TOBACCO vs. PennantPark Investment | IMPERIAL TOBACCO vs. ECHO INVESTMENT ZY |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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