Correlation Between Arbor Technology and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Arbor Technology and Maxigen Biotech 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 Arbor Technology and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Technology and Maxigen Biotech, you can compare the effects of market volatilities on Arbor Technology and Maxigen Biotech 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 Arbor Technology with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Technology and Maxigen Biotech.
Diversification Opportunities for Arbor Technology and Maxigen Biotech
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arbor and Maxigen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Technology and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Arbor Technology 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 Arbor Technology are associated (or correlated) with Maxigen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxigen Biotech has no effect on the direction of Arbor Technology i.e., Arbor Technology and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Arbor Technology and Maxigen Biotech
Assuming the 90 days trading horizon Arbor Technology is expected to under-perform the Maxigen Biotech. In addition to that, Arbor Technology is 1.55 times more volatile than Maxigen Biotech. It trades about -0.13 of its total potential returns per unit of risk. Maxigen Biotech is currently generating about 0.2 per unit of volatility. If you would invest 4,720 in Maxigen Biotech on October 22, 2024 and sell it today you would earn a total of 400.00 from holding Maxigen Biotech or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Arbor Technology vs. Maxigen Biotech
Performance |
| Timeline |
| Arbor Technology |
| Maxigen Biotech |
Arbor Technology and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Technology and Maxigen Biotech
The main advantage of trading using opposite Arbor Technology and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Technology position performs unexpectedly, Maxigen Biotech 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 Maxigen Biotech will offset losses from the drop in Maxigen Biotech's long position.| Arbor Technology vs. Asmedia Technology | Arbor Technology vs. International CSRC Investment | Arbor Technology vs. Sports Gear Co | Arbor Technology vs. STL Technology Co |
| Maxigen Biotech vs. TWOWAY Communications | Maxigen Biotech vs. China Mobile | Maxigen Biotech vs. Taiwan Mobile Co | Maxigen Biotech vs. Tai Tung Communication |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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