Correlation Between Materialise and Tokio Marine

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Materialise and Tokio Marine 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 Tokio Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Tokio Marine Holdings, you can compare the effects of market volatilities on Materialise and Tokio Marine 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 Tokio Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Tokio Marine.

Diversification Opportunities for Materialise and Tokio Marine

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Materialise and Tokio is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Tokio Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokio Marine Holdings 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 Tokio Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokio Marine Holdings has no effect on the direction of Materialise i.e., Materialise and Tokio Marine go up and down completely randomly.

Pair Corralation between Materialise and Tokio Marine

Assuming the 90 days trading horizon Materialise is expected to generate 5.96 times less return on investment than Tokio Marine. In addition to that, Materialise is 1.44 times more volatile than Tokio Marine Holdings. It trades about 0.01 of its total potential returns per unit of risk. Tokio Marine Holdings is currently generating about 0.07 per unit of volatility. If you would invest  1,920  in Tokio Marine Holdings on October 10, 2024 and sell it today you would earn a total of  1,575  from holding Tokio Marine Holdings or generate 82.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Materialise NV  vs.  Tokio Marine Holdings

 Performance 
       Timeline  
Materialise NV 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
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.
Tokio Marine Holdings 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Tokio Marine Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tokio Marine is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Materialise and Tokio Marine Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Materialise and Tokio Marine

The main advantage of trading using opposite Materialise and Tokio Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Tokio Marine 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 Tokio Marine will offset losses from the drop in Tokio Marine's long position.
The idea behind Materialise NV and Tokio Marine Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Commodity Directory
Find actively traded commodities issued by global exchanges