Correlation Between Materialise and WOOLWORTHS HLDGS

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

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

Diversification Opportunities for Materialise and WOOLWORTHS HLDGS

-0.03

Correlation Coefficient

Materialise  WOOLWORTHS HLDGS

Good diversification

The 3 months correlation between Materialise and WOOLWORTHS is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and WOOLWORTHS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOOLWORTHS HLDGS 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 WOOLWORTHS HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOOLWORTHS HLDGS has no effect on the direction of Materialise i.e., Materialise and WOOLWORTHS HLDGS go up and down completely randomly.

Pair Corralation between Materialise and WOOLWORTHS HLDGS

Assuming the 90 days trading horizon Materialise is expected to generate 61.43 times less return on investment than WOOLWORTHS HLDGS. But when comparing it to its historical volatility, Materialise NV is 2.22 times less risky than WOOLWORTHS HLDGS. It trades about 0.0 of its potential returns per unit of risk. WOOLWORTHS HLDGS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  41.00  in WOOLWORTHS HLDGS on October 22, 2024 and sell it today you would earn a total of  273.00  from holding WOOLWORTHS HLDGS or generate 665.85% return on investment over 90 days.

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

Materialise NV  vs.  WOOLWORTHS HLDGS

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 fragile basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

WOOLWORTHS HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WOOLWORTHS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Materialise and WOOLWORTHS HLDGS

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

The idea behind Materialise NV and WOOLWORTHS HLDGS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.