Correlation Between Plastic Omnium and Materialise
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Materialise NV, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Materialise.
Diversification Opportunities for Plastic Omnium and Materialise
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plastic and Materialise is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and Materialise go up and down completely randomly.
Pair Corralation between Plastic Omnium and Materialise
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 0.51 times more return on investment than Materialise. However, Plastic Omnium is 1.97 times less risky than Materialise. It trades about 0.13 of its potential returns per unit of risk. Materialise NV is currently generating about -0.1 per unit of risk. If you would invest 997.00 in Plastic Omnium on October 12, 2024 and sell it today you would earn a total of 40.00 from holding Plastic Omnium or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Materialise NV
Performance |
| Timeline |
| Plastic Omnium |
| Materialise NV |
Plastic Omnium and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Materialise
The main advantage of trading using opposite Plastic Omnium and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. Singapore Reinsurance | Plastic Omnium vs. Dentsply Sirona | Plastic Omnium vs. NEW MILLENNIUM IRON | Plastic Omnium vs. VIENNA INSURANCE GR |
| Materialise vs. AOI Electronics Co | Materialise vs. FORWARD AIR P | Materialise vs. WIZZ AIR HLDGUNSPADR4 | Materialise vs. CHINA SOUTHN AIR H |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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