Correlation Between Materialise and AEON STORES

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

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

Diversification Opportunities for Materialise and AEON STORES

0.08

Correlation Coefficient

Materialise  AEON STORES

Significant diversification

The 3 months correlation between Materialise and AEON is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Materialise i.e., Materialise and AEON STORES go up and down completely randomly.

Pair Corralation between Materialise and AEON STORES

Assuming the 90 days trading horizon Materialise NV is expected to under-perform the AEON STORES. In addition to that, Materialise is 9.87 times more volatile than AEON STORES. It trades about -0.08 of its total potential returns per unit of risk. AEON STORES is currently generating about 0.13 per unit of volatility. If you would invest  5.65  in AEON STORES on December 25, 2024 and sell it today you would earn a total of  0.25  from holding AEON STORES or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Materialise NV  vs.  AEON STORES

Materialise NV

Risk-Adjusted Performance

Very Weak

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

AEON STORES

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AEON STORES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AEON STORES is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Materialise and AEON STORES

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

The idea behind Materialise NV and AEON STORES 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.