Correlation Between Perma-Fix Environmental and Materialise

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

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

Diversification Opportunities for Perma-Fix Environmental and Materialise

0.0

Correlation Coefficient

Perma-Fix Environmental  Materialise

Pay attention - limited upside

The 3 months correlation between Perma-Fix and Materialise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Perma-Fix Environmental 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 Perma Fix Environmental Services 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 Perma-Fix Environmental i.e., Perma-Fix Environmental and Materialise go up and down completely randomly.

Pair Corralation between Perma-Fix Environmental and Materialise

Assuming the 90 days trading horizon Perma-Fix Environmental is expected to generate 24.52 times less return on investment than Materialise. But when comparing it to its historical volatility, Perma Fix Environmental Services is 1.02 times less risky than Materialise. It trades about 0.01 of its potential returns per unit of risk. Materialise NV is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  486.00  in Materialise NV on September 29, 2024 and sell it today you would earn a total of  209.00  from holding Materialise NV or generate 43.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Perma Fix Environmental Servic  vs.  Materialise NV

Perma Fix Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perma Fix Environmental Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Perma-Fix Environmental is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 Perma-Fix Environmental and Materialise

The main advantage of trading using opposite Perma-Fix Environmental and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma-Fix Environmental 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 Perma Fix Environmental Services 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.