Correlation Between Materialise and Zoom Video

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

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

Diversification Opportunities for Materialise and Zoom Video

0.93

Correlation Coefficient

Materialise  Zoom Video

Almost no diversification

The 3 months correlation between Materialise and Zoom is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Materialise i.e., Materialise and Zoom Video go up and down completely randomly.

Pair Corralation between Materialise and Zoom Video

Given the investment horizon of 90 days Materialise NV is expected to generate 1.93 times more return on investment than Zoom Video. However, Materialise is 1.93 times more volatile than Zoom Video Communications. It trades about 0.2 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.1 per unit of risk. If you would invest  500.00  in Materialise NV on October 10, 2024 and sell it today you would earn a total of  307.00  from holding Materialise NV or generate 61.4% return on investment over 90 days.

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

Materialise NV  vs.  Zoom Video Communications

Materialise NV

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Zoom Video Communications

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, Zoom Video displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Materialise and Zoom Video

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

The idea behind Materialise NV and Zoom Video Communications 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.