Correlation Between Gamma Communications and Materialise
Can any of the company-specific risk be diversified away by investing in both Gamma Communications 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 Gamma Communications and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications plc and Materialise NV, you can compare the effects of market volatilities on Gamma Communications 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 Gamma Communications with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Materialise.
Diversification Opportunities for Gamma Communications and Materialise
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gamma and Materialise is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications plc and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Gamma Communications 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 Gamma Communications plc 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 Gamma Communications i.e., Gamma Communications and Materialise go up and down completely randomly.
Pair Corralation between Gamma Communications and Materialise
Assuming the 90 days horizon Gamma Communications plc is expected to generate 0.78 times more return on investment than Materialise. However, Gamma Communications plc is 1.29 times less risky than Materialise. It trades about 0.09 of its potential returns per unit of risk. Materialise NV is currently generating about 0.03 per unit of risk. If you would invest 1,188 in Gamma Communications plc on August 29, 2024 and sell it today you would earn a total of 672.00 from holding Gamma Communications plc or generate 56.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamma Communications plc vs. Materialise NV
Performance |
| Timeline |
| Gamma Communications plc |
| Materialise NV |
Gamma Communications and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Materialise
The main advantage of trading using opposite Gamma Communications and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications 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.| Gamma Communications vs. QINGCI GAMES INC | Gamma Communications vs. TROPHY GAMES DEV | Gamma Communications vs. GigaMedia | Gamma Communications vs. Perseus Mining Limited |
| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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