Correlation Between Maxigen Biotech and Icares Medicus

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Can any of the company-specific risk be diversified away by investing in both Maxigen Biotech and Icares Medicus 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 Icares Medicus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxigen Biotech and Icares Medicus, you can compare the effects of market volatilities on Maxigen Biotech and Icares Medicus 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 Icares Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxigen Biotech and Icares Medicus.

Diversification Opportunities for Maxigen Biotech and Icares Medicus

-0.71
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Maxigen and Icares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Maxigen Biotech and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus 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 Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of Maxigen Biotech i.e., Maxigen Biotech and Icares Medicus go up and down completely randomly.

Pair Corralation between Maxigen Biotech and Icares Medicus

Assuming the 90 days trading horizon Maxigen Biotech is expected to generate 0.95 times more return on investment than Icares Medicus. However, Maxigen Biotech is 1.05 times less risky than Icares Medicus. It trades about 0.33 of its potential returns per unit of risk. Icares Medicus is currently generating about 0.02 per unit of risk. If you would invest  4,595  in Maxigen Biotech on October 9, 2024 and sell it today you would earn a total of  485.00  from holding Maxigen Biotech or generate 10.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Maxigen Biotech  vs.  Icares Medicus

 Performance 
       Timeline  
Maxigen Biotech 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Maxigen Biotech are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Maxigen Biotech showed solid returns over the last few months and may actually be approaching a breakup point.
Icares Medicus 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Icares Medicus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Maxigen Biotech and Icares Medicus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Maxigen Biotech and Icares Medicus

The main advantage of trading using opposite Maxigen Biotech and Icares Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxigen Biotech position performs unexpectedly, Icares Medicus 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 Icares Medicus will offset losses from the drop in Icares Medicus' long position.
The idea behind Maxigen Biotech and Icares Medicus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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