Correlation Between Treasury Wine and Materialise

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

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

Diversification Opportunities for Treasury Wine and Materialise

-0.43

Correlation Coefficient

Treasury Wine  Materialise

Very good diversification

The 3 months correlation between Treasury and Materialise is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Treasury Wine 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 Treasury Wine Estates 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 Treasury Wine i.e., Treasury Wine and Materialise go up and down completely randomly.

Pair Corralation between Treasury Wine and Materialise

Assuming the 90 days horizon Treasury Wine Estates is expected to under-perform the Materialise. But the stock apears to be less risky and, when comparing its historical volatility, Treasury Wine Estates is 1.48 times less risky than Materialise. The stock trades about -0.12 of its potential returns per unit of risk. The Materialise NV is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  448.00  in Materialise NV on April 25, 2025 and sell it today you would earn a total of  72.00  from holding Materialise NV or generate 16.07% return on investment over 90 days.

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

Treasury Wine Estates  vs.  Materialise NV

Treasury Wine Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treasury Wine Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Materialise NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 9 (%) 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 Treasury Wine and Materialise

The main advantage of trading using opposite Treasury Wine and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine 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 Treasury Wine Estates 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.