Correlation Between Materialise and Isetan Mitsukoshi

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

By analyzing existing cross correlation between Materialise NV and Isetan Mitsukoshi Holdings, you can compare the effects of market volatilities on Materialise and Isetan Mitsukoshi 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 Isetan Mitsukoshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Isetan Mitsukoshi.

Diversification Opportunities for Materialise and Isetan Mitsukoshi

0.28

Correlation Coefficient

Materialise  Isetan Mitsukoshi

Modest diversification

The 3 months correlation between Materialise and Isetan is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Isetan Mitsukoshi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isetan Mitsukoshi 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 Isetan Mitsukoshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isetan Mitsukoshi has no effect on the direction of Materialise i.e., Materialise and Isetan Mitsukoshi go up and down completely randomly.

Pair Corralation between Materialise and Isetan Mitsukoshi

Assuming the 90 days trading horizon Materialise NV is expected to under-perform the Isetan Mitsukoshi. In addition to that, Materialise is 1.07 times more volatile than Isetan Mitsukoshi Holdings. It trades about -0.19 of its total potential returns per unit of risk. Isetan Mitsukoshi Holdings is currently generating about 0.13 per unit of volatility. If you would invest  1,430  in Isetan Mitsukoshi Holdings on October 13, 2024 and sell it today you would earn a total of  100.00  from holding Isetan Mitsukoshi Holdings or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

Materialise NV  vs.  Isetan Mitsukoshi Holdings

Materialise NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Isetan Mitsukoshi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Isetan Mitsukoshi Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Isetan Mitsukoshi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Materialise and Isetan Mitsukoshi

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

The idea behind Materialise NV and Isetan Mitsukoshi Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.