Correlation Between Materialise and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both Materialise and AmerisourceBergen 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 AmerisourceBergen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and AmerisourceBergen, you can compare the effects of market volatilities on Materialise and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and AmerisourceBergen.
Diversification Opportunities for Materialise and AmerisourceBergen
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Materialise and AmerisourceBergen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Materialise i.e., Materialise and AmerisourceBergen go up and down completely randomly.
Pair Corralation between Materialise and AmerisourceBergen
Assuming the 90 days trading horizon Materialise is expected to generate 14.8 times less return on investment than AmerisourceBergen. In addition to that, Materialise is 2.36 times more volatile than AmerisourceBergen. It trades about 0.0 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.07 per unit of volatility. If you would invest 14,601 in AmerisourceBergen on October 11, 2024 and sell it today you would earn a total of 7,169 from holding AmerisourceBergen or generate 49.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Materialise NV vs. AmerisourceBergen
Performance |
Timeline |
Materialise NV |
AmerisourceBergen |
Materialise and AmerisourceBergen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Materialise and AmerisourceBergen
The main advantage of trading using opposite Materialise and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.Materialise vs. FEMALE HEALTH | Materialise vs. GEAR4MUSIC LS 10 | Materialise vs. ALERION CLEANPOWER | Materialise vs. CLEAN ENERGY FUELS |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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