Correlation Between ULTRA CLEAN and Materialise
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN 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 ULTRA CLEAN and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ULTRA CLEAN HLDGS and Materialise NV, you can compare the effects of market volatilities on ULTRA CLEAN 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 ULTRA CLEAN with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Materialise.
Diversification Opportunities for ULTRA CLEAN and Materialise
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ULTRA and Materialise is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and ULTRA CLEAN 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 ULTRA CLEAN HLDGS 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 ULTRA CLEAN i.e., ULTRA CLEAN and Materialise go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and Materialise
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to under-perform the Materialise. But the stock apears to be less risky and, when comparing its historical volatility, ULTRA CLEAN HLDGS is 1.42 times less risky than Materialise. The stock trades about -0.07 of its potential returns per unit of risk. The Materialise NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Materialise NV on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Materialise NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. Materialise NV
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| Materialise NV |
ULTRA CLEAN and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and Materialise
The main advantage of trading using opposite ULTRA CLEAN and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN 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.| ULTRA CLEAN vs. Apple Inc | ULTRA CLEAN vs. Apple Inc | ULTRA CLEAN vs. Microsoft | ULTRA CLEAN vs. Microsoft |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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