Correlation Between DATA MODUL and Materialise

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

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

Diversification Opportunities for DATA MODUL and Materialise

0.4

Correlation Coefficient

DATA MODUL  Materialise

Very weak diversification

The 3 months correlation between DATA and Materialise is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding DATA MODUL and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and DATA MODUL 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 DATA MODUL 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 DATA MODUL i.e., DATA MODUL and Materialise go up and down completely randomly.

Pair Corralation between DATA MODUL and Materialise

Assuming the 90 days trading horizon DATA MODUL is expected to under-perform the Materialise. But the stock apears to be less risky and, when comparing its historical volatility, DATA MODUL is 1.55 times less risky than Materialise. The stock trades about -0.01 of its potential returns per unit of risk. The Materialise NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  448.00  in Materialise NV on October 4, 2024 and sell it today you would earn a total of  227.00  from holding Materialise NV or generate 50.67% return on investment over 90 days.

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

DATA MODUL   vs.  Materialise NV

DATA MODUL

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DATA MODUL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, DATA MODUL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 DATA MODUL and Materialise

The main advantage of trading using opposite DATA MODUL and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATA MODUL 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 DATA MODUL 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.