Correlation Between DOCDATA and Materialise

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

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

Diversification Opportunities for DOCDATA and Materialise

-0.89

Correlation Coefficient

DOCDATA  Materialise

Pay attention - limited upside

The 3 months correlation between DOCDATA and Materialise is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding DOCDATA and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and DOCDATA 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 DOCDATA 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 DOCDATA i.e., DOCDATA and Materialise go up and down completely randomly.

Pair Corralation between DOCDATA and Materialise

Assuming the 90 days trading horizon DOCDATA is expected to under-perform the Materialise. In addition to that, DOCDATA is 1.55 times more volatile than Materialise NV. It trades about -0.04 of its total potential returns per unit of risk. Materialise NV is currently generating about 0.01 per unit of volatility. If you would invest  790.00  in Materialise NV on September 29, 2024 and sell it today you would lose (95.00) from holding Materialise NV or give up 12.03% of portfolio value over 90 days.

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

DOCDATA  vs.  Materialise NV

DOCDATA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DOCDATA 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing 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 DOCDATA and Materialise

The main advantage of trading using opposite DOCDATA and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOCDATA 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 DOCDATA 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.