Correlation Between Materialise and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Materialise and Clean 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 Clean 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 Clean Energy Fuels, you can compare the effects of market volatilities on Materialise and Clean 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Clean Energy.
Diversification Opportunities for Materialise and Clean Energy
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Materialise and Clean is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Materialise i.e., Materialise and Clean Energy go up and down completely randomly.
Pair Corralation between Materialise and Clean Energy
Assuming the 90 days trading horizon Materialise NV is expected to generate 1.22 times more return on investment than Clean Energy. However, Materialise is 1.22 times more volatile than Clean Energy Fuels. It trades about 0.02 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about -0.06 per unit of risk. If you would invest 690.00 in Materialise NV on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Materialise NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. Clean Energy Fuels
Performance |
| Timeline |
| Materialise NV |
| Clean Energy Fuels |
Materialise and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Clean Energy
The main advantage of trading using opposite Materialise and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Clean 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| Materialise vs. Goodyear Tire Rubber | Materialise vs. JD SPORTS FASH | Materialise vs. SCIENCE IN SPORT | Materialise vs. ANTA SPORTS PRODUCT |
| Clean Energy vs. SCANSOURCE | Clean Energy vs. United Breweries Co | Clean Energy vs. The Boston Beer | Clean Energy vs. TRADEDOUBLER AB SK |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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