Correlation Between Maxigen Biotech and Microtips Technology
Can any of the company-specific risk be diversified away by investing in both Maxigen Biotech and Microtips Technology 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 Microtips Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxigen Biotech and Microtips Technology, you can compare the effects of market volatilities on Maxigen Biotech and Microtips Technology 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 Microtips Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxigen Biotech and Microtips Technology.
Diversification Opportunities for Maxigen Biotech and Microtips Technology
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maxigen and Microtips is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Maxigen Biotech and Microtips Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microtips Technology 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 Microtips Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microtips Technology has no effect on the direction of Maxigen Biotech i.e., Maxigen Biotech and Microtips Technology go up and down completely randomly.
Pair Corralation between Maxigen Biotech and Microtips Technology
Assuming the 90 days trading horizon Maxigen Biotech is expected to generate 0.84 times more return on investment than Microtips Technology. However, Maxigen Biotech is 1.2 times less risky than Microtips Technology. It trades about 0.11 of its potential returns per unit of risk. Microtips Technology is currently generating about -0.2 per unit of risk. If you would invest 4,230 in Maxigen Biotech on August 30, 2024 and sell it today you would earn a total of 140.00 from holding Maxigen Biotech or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maxigen Biotech vs. Microtips Technology
Performance |
| Timeline |
| Maxigen Biotech |
| Microtips Technology |
Maxigen Biotech and Microtips Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxigen Biotech and Microtips Technology
The main advantage of trading using opposite Maxigen Biotech and Microtips Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxigen Biotech position performs unexpectedly, Microtips Technology 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 Microtips Technology will offset losses from the drop in Microtips Technology's long position.| Maxigen Biotech vs. Phytohealth Corp | Maxigen Biotech vs. Yung Zip Chemical | Maxigen Biotech vs. Leatec Fine Ceramics | Maxigen Biotech vs. Information Technology Total |
| Microtips Technology vs. Chailease Holding Co | Microtips Technology vs. Sheng Yu Steel | Microtips Technology vs. Cameo Communications | Microtips Technology vs. Great Computer |
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.
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