Correlation Between Materialise and NEWELL RUBBERMAID

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

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

Diversification Opportunities for Materialise and NEWELL RUBBERMAID

0.23

Correlation Coefficient

Materialise  NEWELL RUBBERMAID

Modest diversification

The 3 months correlation between Materialise and NEWELL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of Materialise i.e., Materialise and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between Materialise and NEWELL RUBBERMAID

Assuming the 90 days trading horizon Materialise NV is expected to generate 1.41 times more return on investment than NEWELL RUBBERMAID. However, Materialise is 1.41 times more volatile than NEWELL RUBBERMAID . It trades about -0.23 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about -0.33 per unit of risk. If you would invest  830.00  in Materialise NV on December 1, 2024 and sell it today you would lose (336.00) from holding Materialise NV or give up 40.48% of portfolio value over 90 days.

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

Materialise NV  vs.  NEWELL RUBBERMAID

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 uncertain 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.

NEWELL RUBBERMAID

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEWELL RUBBERMAID has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential 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.

Pair Trading with Materialise and NEWELL RUBBERMAID

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

The idea behind Materialise NV and NEWELL RUBBERMAID 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.