Correlation Between Ming Le and Materialise

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

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

Diversification Opportunities for Ming Le and Materialise

0.75

Correlation Coefficient

Ming Le  Materialise

Poor diversification

The 3 months correlation between Ming and Materialise is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Ming Le 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 Ming Le Sports 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 Ming Le i.e., Ming Le and Materialise go up and down completely randomly.

Pair Corralation between Ming Le and Materialise

Assuming the 90 days trading horizon Ming Le is expected to generate 1.44 times less return on investment than Materialise. In addition to that, Ming Le is 1.21 times more volatile than Materialise NV. It trades about 0.1 of its total potential returns per unit of risk. Materialise NV is currently generating about 0.18 per unit of volatility. If you would invest  466.00  in Materialise NV on September 3, 2024 and sell it today you would earn a total of  219.00  from holding Materialise NV or generate 47.0% return on investment over 90 days.

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

Ming Le Sports  vs.  Materialise NV

Ming Le Sports

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ming Le Sports are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ming Le unveiled solid returns over the last few months and may actually be approaching a breakup point.

Materialise NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 14 (%) 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 Ming Le and Materialise

The main advantage of trading using opposite Ming Le and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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 Ming Le Sports 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.