Correlation Between Kaufman Broad and Materialise
Can any of the company-specific risk be diversified away by investing in both Kaufman Broad and Materialise 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 Kaufman Broad and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Broad SA and Materialise NV, you can compare the effects of market volatilities on Kaufman Broad and Materialise 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 Kaufman Broad with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Broad and Materialise.
Diversification Opportunities for Kaufman Broad and Materialise
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kaufman and Materialise is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Broad SA and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Kaufman Broad 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 Kaufman Broad SA are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Kaufman Broad i.e., Kaufman Broad and Materialise go up and down completely randomly.
Pair Corralation between Kaufman Broad and Materialise
Assuming the 90 days horizon Kaufman Broad SA is expected to generate 0.63 times more return on investment than Materialise. However, Kaufman Broad SA is 1.59 times less risky than Materialise. It trades about 0.04 of its potential returns per unit of risk. Materialise NV is currently generating about 0.0 per unit of risk. If you would invest 2,217 in Kaufman Broad SA on September 3, 2024 and sell it today you would earn a total of 888.00 from holding Kaufman Broad SA or generate 40.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaufman Broad SA vs. Materialise NV
Performance |
| Timeline |
| Kaufman Broad SA |
| Materialise NV |
Kaufman Broad and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Broad and Materialise
The main advantage of trading using opposite Kaufman Broad and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Broad position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Kaufman Broad vs. Sekisui Chemical Co | Kaufman Broad vs. BARRATT DEVEL UNSPADR2 | Kaufman Broad vs. Superior Plus Corp | Kaufman Broad vs. NMI Holdings |
| Materialise vs. Ming Le Sports | Materialise vs. Insurance Australia Group | Materialise vs. Direct Line Insurance | Materialise vs. Perseus Mining Limited |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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