Correlation Between Materialise and BORR DRILLING

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

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

Diversification Opportunities for Materialise and BORR DRILLING

-0.9

Correlation Coefficient

Materialise  BORR DRILLING

Pay attention - limited upside

The 3 months correlation between Materialise and BORR is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW 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 BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Materialise i.e., Materialise and BORR DRILLING go up and down completely randomly.

Pair Corralation between Materialise and BORR DRILLING

Assuming the 90 days trading horizon Materialise NV is expected to generate 1.2 times more return on investment than BORR DRILLING. However, Materialise is 1.2 times more volatile than BORR DRILLING NEW. It trades about 0.2 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.12 per unit of risk. If you would invest  456.00  in Materialise NV on October 8, 2024 and sell it today you would earn a total of  289.00  from holding Materialise NV or generate 63.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Materialise NV  vs.  BORR DRILLING NEW

Materialise NV

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 16 (%) 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.

BORR DRILLING NEW

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BORR DRILLING NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Materialise and BORR DRILLING

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

The idea behind Materialise NV and BORR DRILLING NEW 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 CEOs Directory module to screen CEOs from public companies around the world.