Correlation Between CHINA EDUCATION and Materialise
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Materialise NV, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Materialise.
Diversification Opportunities for CHINA EDUCATION and Materialise
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Materialise is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Materialise go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Materialise
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to generate 1.58 times more return on investment than Materialise. However, CHINA EDUCATION is 1.58 times more volatile than Materialise NV. It trades about 0.04 of its potential returns per unit of risk. Materialise NV is currently generating about 0.01 per unit of risk. If you would invest 31.00 in CHINA EDUCATION GROUP on September 12, 2024 and sell it today you would earn a total of 13.00 from holding CHINA EDUCATION GROUP or generate 41.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Materialise NV
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Materialise NV |
CHINA EDUCATION and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Materialise
The main advantage of trading using opposite CHINA EDUCATION and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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