Correlation Between Bioteque and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Bioteque 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 Bioteque and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bioteque and Maxigen Biotech, you can compare the effects of market volatilities on Bioteque 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 Bioteque with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bioteque and Maxigen Biotech.
Diversification Opportunities for Bioteque and Maxigen Biotech
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bioteque and Maxigen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bioteque and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Bioteque 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 Bioteque 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 Bioteque i.e., Bioteque and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Bioteque and Maxigen Biotech
Assuming the 90 days trading horizon Bioteque is expected to generate 1.62 times less return on investment than Maxigen Biotech. But when comparing it to its historical volatility, Bioteque is 2.27 times less risky than Maxigen Biotech. It trades about 0.15 of its potential returns per unit of risk. Maxigen Biotech is currently generating about 0.11 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bioteque vs. Maxigen Biotech
Performance |
| Timeline |
| Bioteque |
| Maxigen Biotech |
Bioteque and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bioteque and Maxigen Biotech
The main advantage of trading using opposite Bioteque and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bioteque 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.| Bioteque vs. StShine Optical Co | Bioteque vs. United Orthopedic | Bioteque vs. Excelsior Medical Co | Bioteque vs. Pacific Hospital Supply |
| Maxigen Biotech vs. Phytohealth Corp | Maxigen Biotech vs. Yung Zip Chemical | Maxigen Biotech vs. Leatec Fine Ceramics | Maxigen Biotech vs. Information Technology Total |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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