Correlation Between Clean Energy and Materialise
Can any of the company-specific risk be diversified away by investing in both Clean Energy 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 Clean Energy and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Energy Fuels and Materialise NV, you can compare the effects of market volatilities on Clean Energy 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 Clean Energy with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Energy and Materialise.
Diversification Opportunities for Clean Energy and Materialise
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Clean and Materialise is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Clean Energy Fuels and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Clean Energy 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 Clean Energy Fuels 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 Clean Energy i.e., Clean Energy and Materialise go up and down completely randomly.
Pair Corralation between Clean Energy and Materialise
Assuming the 90 days horizon Clean Energy Fuels is expected to under-perform the Materialise. But the stock apears to be less risky and, when comparing its historical volatility, Clean Energy Fuels is 1.22 times less risky than Materialise. The stock trades about -0.06 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clean Energy Fuels vs. Materialise NV
Performance |
| Timeline |
| Clean Energy Fuels |
| Materialise NV |
Clean Energy and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Energy and Materialise
The main advantage of trading using opposite Clean Energy and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Energy 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.| Clean Energy vs. SCANSOURCE | Clean Energy vs. United Breweries Co | Clean Energy vs. The Boston Beer | Clean Energy vs. TRADEDOUBLER AB SK |
| Materialise vs. Goodyear Tire Rubber | Materialise vs. JD SPORTS FASH | Materialise vs. SCIENCE IN SPORT | Materialise vs. ANTA SPORTS PRODUCT |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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