Correlation Between GLOBUS MEDICAL-A and Materialise
Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBUS MEDICAL A and Materialise NV, you can compare the effects of market volatilities on GLOBUS MEDICAL-A 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 GLOBUS MEDICAL-A with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL-A and Materialise.
Diversification Opportunities for GLOBUS MEDICAL-A and Materialise
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GLOBUS and Materialise is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and GLOBUS MEDICAL-A 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 GLOBUS MEDICAL A 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 GLOBUS MEDICAL-A i.e., GLOBUS MEDICAL-A and Materialise go up and down completely randomly.
Pair Corralation between GLOBUS MEDICAL-A and Materialise
Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 0.64 times more return on investment than Materialise. However, GLOBUS MEDICAL A is 1.57 times less risky than Materialise. It trades about 0.15 of its potential returns per unit of risk. Materialise NV is currently generating about 0.08 per unit of risk. If you would invest 4,860 in GLOBUS MEDICAL A on October 12, 2024 and sell it today you would earn a total of 3,690 from holding GLOBUS MEDICAL A or generate 75.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLOBUS MEDICAL A vs. Materialise NV
Performance |
| Timeline |
| GLOBUS MEDICAL A |
| Materialise NV |
GLOBUS MEDICAL-A and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBUS MEDICAL-A and Materialise
The main advantage of trading using opposite GLOBUS MEDICAL-A and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL-A 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.| GLOBUS MEDICAL-A vs. Plastic Omnium | GLOBUS MEDICAL-A vs. The Yokohama Rubber | GLOBUS MEDICAL-A vs. Materialise NV | GLOBUS MEDICAL-A vs. TOREX SEMICONDUCTOR LTD |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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