Correlation Between GAZTRTECHNIUADR1/5EO01 and Materialise
Can any of the company-specific risk be diversified away by investing in both GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAZTRTECHNIUADR15EO01 and Materialise NV, you can compare the effects of market volatilities on GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR1/5EO01 with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAZTRTECHNIUADR1/5EO01 and Materialise.
Diversification Opportunities for GAZTRTECHNIUADR1/5EO01 and Materialise
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GAZTRTECHNIUADR1/5EO01 and Materialise is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding GAZTRTECHNIUADR15EO01 and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR15EO01 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 GAZTRTECHNIUADR1/5EO01 i.e., GAZTRTECHNIUADR1/5EO01 and Materialise go up and down completely randomly.
Pair Corralation between GAZTRTECHNIUADR1/5EO01 and Materialise
Assuming the 90 days trading horizon GAZTRTECHNIUADR1/5EO01 is expected to generate 2.03 times less return on investment than Materialise. But when comparing it to its historical volatility, GAZTRTECHNIUADR15EO01 is 1.81 times less risky than Materialise. It trades about 0.12 of its potential returns per unit of risk. Materialise NV is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 755.00 in Materialise NV on November 7, 2024 and sell it today you would earn a total of 65.00 from holding Materialise NV or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAZTRTECHNIUADR15EO01 vs. Materialise NV
Performance |
| Timeline |
| GAZTRTECHNIUADR1/5EO01 |
| Materialise NV |
GAZTRTECHNIUADR1/5EO01 and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAZTRTECHNIUADR1/5EO01 and Materialise
The main advantage of trading using opposite GAZTRTECHNIUADR1/5EO01 and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAZTRTECHNIUADR1/5EO01 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.The idea behind GAZTRTECHNIUADR15EO01 and Materialise NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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