Correlation Between ASTRA INTERNATIONAL and Materialise

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

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

Diversification Opportunities for ASTRA INTERNATIONAL and Materialise

-0.14

Correlation Coefficient

ASTRA INTERNATIONAL  Materialise

Good diversification

The 3 months correlation between ASTRA and Materialise is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and Materialise go up and down completely randomly.

Pair Corralation between ASTRA INTERNATIONAL and Materialise

Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to under-perform the Materialise. But the stock apears to be less risky and, when comparing its historical volatility, ASTRA INTERNATIONAL is 1.75 times less risky than Materialise. The stock trades about -0.02 of its potential returns per unit of risk. The Materialise NV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  708.00  in Materialise NV on October 5, 2024 and sell it today you would lose (33.00) from holding Materialise NV or give up 4.66% of portfolio value over 90 days.

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

ASTRA INTERNATIONAL  vs.  Materialise NV

ASTRA INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASTRA INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ASTRA INTERNATIONAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Materialise NV

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Materialise NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively fragile basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASTRA INTERNATIONAL and Materialise

The main advantage of trading using opposite ASTRA INTERNATIONAL and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.