Correlation Between CarsalesCom and Materialise
Can any of the company-specific risk be diversified away by investing in both CarsalesCom 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 CarsalesCom and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Materialise NV, you can compare the effects of market volatilities on CarsalesCom 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 CarsalesCom with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarsalesCom and Materialise.
Diversification Opportunities for CarsalesCom and Materialise
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CarsalesCom and Materialise is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and CarsalesCom 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 CarsalesCom 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 CarsalesCom i.e., CarsalesCom and Materialise go up and down completely randomly.
Pair Corralation between CarsalesCom and Materialise
Assuming the 90 days horizon CarsalesCom is expected to generate 4.62 times less return on investment than Materialise. But when comparing it to its historical volatility, CarsalesCom is 2.82 times less risky than Materialise. It trades about 0.14 of its potential returns per unit of risk. Materialise NV is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 444.00 in Materialise NV on September 12, 2024 and sell it today you would earn a total of 316.00 from holding Materialise NV or generate 71.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. Materialise NV
Performance |
| Timeline |
| CarsalesCom |
| Materialise NV |
CarsalesCom and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarsalesCom and Materialise
The main advantage of trading using opposite CarsalesCom and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom 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.| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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