Correlation Between Maxigen Biotech and Alchip Technologies
Can any of the company-specific risk be diversified away by investing in both Maxigen Biotech and Alchip 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 Alchip 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 Alchip Technologies, you can compare the effects of market volatilities on Maxigen Biotech and Alchip 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 Alchip Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxigen Biotech and Alchip Technologies.
Diversification Opportunities for Maxigen Biotech and Alchip Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maxigen and Alchip is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Maxigen Biotech and Alchip Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchip 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 Alchip Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchip Technologies has no effect on the direction of Maxigen Biotech i.e., Maxigen Biotech and Alchip Technologies go up and down completely randomly.
Pair Corralation between Maxigen Biotech and Alchip Technologies
Assuming the 90 days trading horizon Maxigen Biotech is expected to generate 1.7 times less return on investment than Alchip Technologies. But when comparing it to its historical volatility, Maxigen Biotech is 2.23 times less risky than Alchip Technologies. It trades about 0.17 of its potential returns per unit of risk. Alchip Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 204,000 in Alchip Technologies on September 1, 2024 and sell it today you would earn a total of 17,500 from holding Alchip Technologies or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maxigen Biotech vs. Alchip Technologies
Performance |
| Timeline |
| Maxigen Biotech |
| Alchip Technologies |
Maxigen Biotech and Alchip Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxigen Biotech and Alchip Technologies
The main advantage of trading using opposite Maxigen Biotech and Alchip Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxigen Biotech position performs unexpectedly, Alchip 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 Alchip Technologies will offset losses from the drop in Alchip Technologies' long position.| Maxigen Biotech vs. Phytohealth Corp | Maxigen Biotech vs. Orient Pharma Co | Maxigen Biotech vs. Yung Zip Chemical |
| Alchip Technologies vs. Taiwan Semiconductor Manufacturing | Alchip Technologies vs. MediaTek | Alchip Technologies vs. United Microelectronics | Alchip Technologies vs. Novatek Microelectronics Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |