Correlation Between ALEFARM BREWING and Materialise
Can any of the company-specific risk be diversified away by investing in both ALEFARM BREWING 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 ALEFARM BREWING and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALEFARM BREWING DK 05 and Materialise NV, you can compare the effects of market volatilities on ALEFARM BREWING 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 ALEFARM BREWING with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and Materialise.
Diversification Opportunities for ALEFARM BREWING and Materialise
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ALEFARM and Materialise is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 ALEFARM BREWING i.e., ALEFARM BREWING and Materialise go up and down completely randomly.
Pair Corralation between ALEFARM BREWING and Materialise
Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to generate 1.23 times more return on investment than Materialise. However, ALEFARM BREWING is 1.23 times more volatile than Materialise NV. It trades about 0.11 of its potential returns per unit of risk. Materialise NV is currently generating about -0.1 per unit of risk. If you would invest 16.00 in ALEFARM BREWING DK 05 on October 14, 2024 and sell it today you would earn a total of 1.00 from holding ALEFARM BREWING DK 05 or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALEFARM BREWING DK 05 vs. Materialise NV
Performance |
| Timeline |
| ALEFARM BREWING DK |
| Materialise NV |
ALEFARM BREWING and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALEFARM BREWING and Materialise
The main advantage of trading using opposite ALEFARM BREWING and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING 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.| ALEFARM BREWING vs. DALATA HOTEL | ALEFARM BREWING vs. MHP Hotel AG | ALEFARM BREWING vs. UNIQA INSURANCE GR | ALEFARM BREWING vs. InterContinental Hotels Group |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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