Correlation Between SPORTING and Materialise

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

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

Diversification Opportunities for SPORTING and Materialise

0.21

Correlation Coefficient

SPORTING  Materialise

Modest diversification

The 3 months correlation between SPORTING and Materialise is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and SPORTING 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 SPORTING 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 SPORTING i.e., SPORTING and Materialise go up and down completely randomly.

Pair Corralation between SPORTING and Materialise

Assuming the 90 days trading horizon SPORTING is expected to generate 12.14 times less return on investment than Materialise. But when comparing it to its historical volatility, SPORTING is 3.15 times less risky than Materialise. It trades about 0.05 of its potential returns per unit of risk. Materialise NV is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  450.00  in Materialise NV on September 20, 2024 and sell it today you would earn a total of  290.00  from holding Materialise NV or generate 64.44% return on investment over 90 days.

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

SPORTING  vs.  Materialise NV

SPORTING

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPORTING are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, SPORTING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 uncertain basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPORTING and Materialise

The main advantage of trading using opposite SPORTING and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING 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 SPORTING 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.