Correlation Between Materialise and SP Global

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

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

Diversification Opportunities for Materialise and SP Global

0.53

Correlation Coefficient

Materialise  SP Global

Very weak diversification

The 3 months correlation between Materialise and MHL is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of Materialise i.e., Materialise and SP Global go up and down completely randomly.

Pair Corralation between Materialise and SP Global

Assuming the 90 days trading horizon Materialise NV is expected to under-perform the SP Global. In addition to that, Materialise is 3.89 times more volatile than SP Global. It trades about -0.08 of its total potential returns per unit of risk. SP Global is currently generating about -0.04 per unit of volatility. If you would invest  48,139  in SP Global on December 25, 2024 and sell it today you would lose (2,014) from holding SP Global or give up 4.18% of portfolio value over 90 days.

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

Materialise NV  vs.  SP Global

Materialise NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Materialise NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SP Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days SP Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SP Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Materialise and SP Global

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

The idea behind Materialise NV and SP Global 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..