Correlation Between Materialise and Geberit AG

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

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

Diversification Opportunities for Materialise and Geberit AG

-0.05

Correlation Coefficient

Materialise  Geberit AG

Good diversification

The 3 months correlation between Materialise and Geberit is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Geberit AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG 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 Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG has no effect on the direction of Materialise i.e., Materialise and Geberit AG go up and down completely randomly.

Pair Corralation between Materialise and Geberit AG

Assuming the 90 days trading horizon Materialise NV is expected to generate 2.04 times more return on investment than Geberit AG. However, Materialise is 2.04 times more volatile than Geberit AG. It trades about -0.04 of its potential returns per unit of risk. Geberit AG is currently generating about -0.1 per unit of risk. If you would invest  775.00  in Materialise NV on October 10, 2024 and sell it today you would lose (30.00) from holding Materialise NV or give up 3.87% of portfolio value over 90 days.

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

Materialise NV  vs.  Geberit AG

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.

Geberit AG

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Geberit AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Geberit AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Materialise and Geberit AG

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

The idea behind Materialise NV and Geberit AG 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.