Correlation Between Maxigen Biotech and Ichia Technologies
Can any of the company-specific risk be diversified away by investing in both Maxigen Biotech and Ichia Technologies 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 Maxigen Biotech and Ichia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxigen Biotech and Ichia Technologies, you can compare the effects of market volatilities on Maxigen Biotech and Ichia Technologies 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 Maxigen Biotech with a short position of Ichia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxigen Biotech and Ichia Technologies.
Diversification Opportunities for Maxigen Biotech and Ichia Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maxigen and Ichia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Maxigen Biotech and Ichia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichia Technologies and Maxigen Biotech 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 Maxigen Biotech are associated (or correlated) with Ichia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichia Technologies has no effect on the direction of Maxigen Biotech i.e., Maxigen Biotech and Ichia Technologies go up and down completely randomly.
Pair Corralation between Maxigen Biotech and Ichia Technologies
Assuming the 90 days trading horizon Maxigen Biotech is expected to generate 2.72 times less return on investment than Ichia Technologies. But when comparing it to its historical volatility, Maxigen Biotech is 1.41 times less risky than Ichia Technologies. It trades about 0.03 of its potential returns per unit of risk. Ichia Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,580 in Ichia Technologies on September 1, 2024 and sell it today you would earn a total of 560.00 from holding Ichia Technologies or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maxigen Biotech vs. Ichia Technologies
Performance |
| Timeline |
| Maxigen Biotech |
| Ichia Technologies |
Maxigen Biotech and Ichia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxigen Biotech and Ichia Technologies
The main advantage of trading using opposite Maxigen Biotech and Ichia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxigen Biotech position performs unexpectedly, Ichia Technologies 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 Ichia Technologies will offset losses from the drop in Ichia Technologies' long position.| Maxigen Biotech vs. Phytohealth Corp | Maxigen Biotech vs. Orient Pharma Co | Maxigen Biotech vs. Yung Zip Chemical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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