Correlation Between Materialise and AXA SA

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

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

Diversification Opportunities for Materialise and AXA SA

-0.55

Correlation Coefficient

Materialise  AXA SA

Excellent diversification

The 3 months correlation between Materialise and AXA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Materialise i.e., Materialise and AXA SA go up and down completely randomly.

Pair Corralation between Materialise and AXA SA

Assuming the 90 days trading horizon Materialise NV is expected to under-perform the AXA SA. In addition to that, Materialise is 2.66 times more volatile than AXA SA. It trades about 0.0 of its total potential returns per unit of risk. AXA SA is currently generating about 0.06 per unit of volatility. If you would invest  2,559  in AXA SA on October 24, 2024 and sell it today you would earn a total of  967.00  from holding AXA SA or generate 37.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Materialise NV  vs.  AXA SA

Materialise NV

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

AXA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AXA SA 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 AXA SA

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

The idea behind Materialise NV and AXA SA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.