Correlation Between Materialise and Microsoft

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

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

Diversification Opportunities for Materialise and Microsoft

0.83

Correlation Coefficient

Materialise  Microsoft

Very poor diversification

The 3 months correlation between Materialise and Microsoft is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Materialise i.e., Materialise and Microsoft go up and down completely randomly.

Pair Corralation between Materialise and Microsoft

Assuming the 90 days trading horizon Materialise NV is expected to under-perform the Microsoft. In addition to that, Materialise is 2.31 times more volatile than Microsoft. It trades about 0.0 of its total potential returns per unit of risk. Microsoft is currently generating about 0.06 per unit of volatility. If you would invest  30,219  in Microsoft on April 20, 2025 and sell it today you would earn a total of  13,601  from holding Microsoft or generate 45.01% return on investment over 90 days.

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

Materialise NV  vs.  Microsoft

Materialise NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Microsoft

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Microsoft exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Materialise and Microsoft

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

The idea behind Materialise NV and Microsoft 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.