Correlation Between ANTA SPORTS and Materialise

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

By analyzing existing cross correlation between ANTA SPORTS PRODUCT and Materialise NV, you can compare the effects of market volatilities on ANTA SPORTS and Materialise 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 ANTA SPORTS with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and Materialise.

Diversification Opportunities for ANTA SPORTS and Materialise

-0.49

Correlation Coefficient

ANTA SPORTS  Materialise

Very good diversification

The 3 months correlation between ANTA and Materialise is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and ANTA SPORTS 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 ANTA SPORTS PRODUCT are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and Materialise go up and down completely randomly.

Pair Corralation between ANTA SPORTS and Materialise

Assuming the 90 days trading horizon ANTA SPORTS PRODUCT is expected to generate 0.72 times more return on investment than Materialise. However, ANTA SPORTS PRODUCT is 1.39 times less risky than Materialise. It trades about 0.09 of its potential returns per unit of risk. Materialise NV is currently generating about 0.02 per unit of risk. If you would invest  935.00  in ANTA SPORTS PRODUCT on September 26, 2024 and sell it today you would earn a total of  47.00  from holding ANTA SPORTS PRODUCT or generate 5.03% return on investment over 90 days.

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

ANTA SPORTS PRODUCT  vs.  Materialise NV

ANTA SPORTS PRODUCT

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days ANTA SPORTS PRODUCT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Materialise NV

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 12 (%) 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.

Pair Trading with ANTA SPORTS and Materialise

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

The idea behind ANTA SPORTS PRODUCT and Materialise NV 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.