Correlation Between Materialise and Sixt Leasing

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

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

Diversification Opportunities for Materialise and Sixt Leasing

-0.9

Correlation Coefficient

Materialise  Sixt Leasing

Pay attention - limited upside

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

Pair Corralation between Materialise and Sixt Leasing

Assuming the 90 days trading horizon Materialise NV is expected to generate 2.22 times more return on investment than Sixt Leasing. However, Materialise is 2.22 times more volatile than Sixt Leasing SE. It trades about 0.18 of its potential returns per unit of risk. Sixt Leasing SE is currently generating about -0.1 per unit of risk. If you would invest  466.00  in Materialise NV on September 3, 2024 and sell it today you would earn a total of  219.00  from holding Materialise NV or generate 47.0% return on investment over 90 days.

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

Materialise NV  vs.  Sixt Leasing SE

Materialise NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sixt Leasing SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sixt Leasing SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Materialise and Sixt Leasing

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

The idea behind Materialise NV and Sixt Leasing SE 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.