Correlation Between Materialise and Eversource Energy
Can any of the company-specific risk be diversified away by investing in both Materialise and Eversource Energy 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 Eversource Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Eversource Energy, you can compare the effects of market volatilities on Materialise and Eversource Energy 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 Eversource Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Eversource Energy.
Diversification Opportunities for Materialise and Eversource Energy
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Materialise and Eversource is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Eversource Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversource Energy 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 Eversource Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversource Energy has no effect on the direction of Materialise i.e., Materialise and Eversource Energy go up and down completely randomly.
Pair Corralation between Materialise and Eversource Energy
Assuming the 90 days trading horizon Materialise NV is expected to generate 2.35 times more return on investment than Eversource Energy. However, Materialise is 2.35 times more volatile than Eversource Energy. It trades about 0.18 of its potential returns per unit of risk. Eversource Energy is currently generating about 0.03 per unit of risk. If you would invest 466.00 in Materialise NV on September 3, 2024 and sell it today you would earn a total of 219.00 from holding Materialise NV or generate 47.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. Eversource Energy
Performance |
| Timeline |
| Materialise NV |
| Eversource Energy |
Materialise and Eversource Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Eversource Energy
The main advantage of trading using opposite Materialise and Eversource Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Eversource Energy 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 Eversource Energy will offset losses from the drop in Eversource Energy's long position.| Materialise vs. Ming Le Sports | Materialise vs. Insurance Australia Group | Materialise vs. Direct Line Insurance | Materialise vs. Perseus Mining Limited |
| Eversource Energy vs. Compagnie Plastic Omnium | Eversource Energy vs. Materialise NV | Eversource Energy vs. Goodyear Tire Rubber | Eversource Energy vs. LION ONE METALS |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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