Correlation Between Chunghwa Chemical and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Chunghwa Chemical and Maxigen Biotech 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 Chunghwa Chemical and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Chemical Synthesis and Maxigen Biotech, you can compare the effects of market volatilities on Chunghwa Chemical and Maxigen Biotech 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 Chunghwa Chemical with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Chemical and Maxigen Biotech.
Diversification Opportunities for Chunghwa Chemical and Maxigen Biotech
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chunghwa and Maxigen is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Chemical Synthesis and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Chunghwa Chemical 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 Chunghwa Chemical Synthesis are associated (or correlated) with Maxigen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxigen Biotech has no effect on the direction of Chunghwa Chemical i.e., Chunghwa Chemical and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Chunghwa Chemical and Maxigen Biotech
Assuming the 90 days trading horizon Chunghwa Chemical is expected to generate 68.46 times less return on investment than Maxigen Biotech. But when comparing it to its historical volatility, Chunghwa Chemical Synthesis is 1.33 times less risky than Maxigen Biotech. It trades about 0.0 of its potential returns per unit of risk. Maxigen Biotech is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,690 in Maxigen Biotech on October 26, 2024 and sell it today you would earn a total of 340.00 from holding Maxigen Biotech or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Chemical Synthesis vs. Maxigen Biotech
Performance |
| Timeline |
| Chunghwa Chemical |
| Maxigen Biotech |
Chunghwa Chemical and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Chemical and Maxigen Biotech
The main advantage of trading using opposite Chunghwa Chemical and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Chemical position performs unexpectedly, Maxigen Biotech 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 Maxigen Biotech will offset losses from the drop in Maxigen Biotech's long position.| Chunghwa Chemical vs. CHC Healthcare Group | Chunghwa Chemical vs. GenMont Biotech | Chunghwa Chemical vs. Sinphar Pharmaceutical Co | Chunghwa Chemical vs. Abnova Taiwan Corp |
| Maxigen Biotech vs. Microelectronics Technology | Maxigen Biotech vs. Loop Telecommunication International | Maxigen Biotech vs. Thinking Electronic Industrial | Maxigen Biotech vs. Tung Thih Electronic |
Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |