Correlation Between Materialise and ZhongAn Online

Can any of the company-specific risk be diversified away by investing in both Materialise and ZhongAn Online 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 Materialise and ZhongAn Online into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Materialise NV and ZhongAn Online P, you can compare the effects of market volatilities on Materialise and ZhongAn Online 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 Materialise with a short position of ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and ZhongAn Online.

Diversification Opportunities for Materialise and ZhongAn Online

-0.37

Correlation Coefficient

Materialise  ZhongAn Online

Very good diversification

The 3 months correlation between Materialise and ZhongAn is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P and Materialise 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 Materialise NV are associated (or correlated) with ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of Materialise i.e., Materialise and ZhongAn Online go up and down completely randomly.

Pair Corralation between Materialise and ZhongAn Online

Assuming the 90 days trading horizon Materialise NV is expected to generate 1.44 times more return on investment than ZhongAn Online. However, Materialise is 1.44 times more volatile than ZhongAn Online P. It trades about 0.2 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.17 per unit of risk. If you would invest  550.00  in Materialise NV on October 6, 2024 and sell it today you would earn a total of  195.00  from holding Materialise NV or generate 35.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Materialise NV  vs.  ZhongAn Online P

Materialise NV

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

ZhongAn Online P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZhongAn Online P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Materialise and ZhongAn Online

The main advantage of trading using opposite Materialise and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.

The idea behind Materialise NV and ZhongAn Online P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.