Correlation Between Maxigen Biotech and Wistron NeWeb
Can any of the company-specific risk be diversified away by investing in both Maxigen Biotech and Wistron NeWeb 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 Wistron NeWeb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxigen Biotech and Wistron NeWeb Corp, you can compare the effects of market volatilities on Maxigen Biotech and Wistron NeWeb 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 Wistron NeWeb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxigen Biotech and Wistron NeWeb.
Diversification Opportunities for Maxigen Biotech and Wistron NeWeb
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maxigen and Wistron is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Maxigen Biotech and Wistron NeWeb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron NeWeb Corp 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 Wistron NeWeb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron NeWeb Corp has no effect on the direction of Maxigen Biotech i.e., Maxigen Biotech and Wistron NeWeb go up and down completely randomly.
Pair Corralation between Maxigen Biotech and Wistron NeWeb
Assuming the 90 days trading horizon Maxigen Biotech is expected to generate 0.57 times more return on investment than Wistron NeWeb. However, Maxigen Biotech is 1.76 times less risky than Wistron NeWeb. It trades about 0.17 of its potential returns per unit of risk. Wistron NeWeb Corp is currently generating about -0.07 per unit of risk. If you would invest 4,230 in Maxigen Biotech on September 1, 2024 and sell it today you would earn a total of 230.00 from holding Maxigen Biotech or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maxigen Biotech vs. Wistron NeWeb Corp
Performance |
| Timeline |
| Maxigen Biotech |
| Wistron NeWeb Corp |
Maxigen Biotech and Wistron NeWeb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxigen Biotech and Wistron NeWeb
The main advantage of trading using opposite Maxigen Biotech and Wistron NeWeb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxigen Biotech position performs unexpectedly, Wistron NeWeb 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 Wistron NeWeb will offset losses from the drop in Wistron NeWeb's 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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