Correlation Between Hsinli Chemical and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Hsinli Chemical 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 Hsinli Chemical and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hsinli Chemical Industrial and Maxigen Biotech, you can compare the effects of market volatilities on Hsinli Chemical 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 Hsinli Chemical with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hsinli Chemical and Maxigen Biotech.
Diversification Opportunities for Hsinli Chemical and Maxigen Biotech
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hsinli and Maxigen is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hsinli Chemical Industrial and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Hsinli Chemical 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 Hsinli Chemical Industrial 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 Hsinli Chemical i.e., Hsinli Chemical and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Hsinli Chemical and Maxigen Biotech
Assuming the 90 days trading horizon Hsinli Chemical Industrial is expected to under-perform the Maxigen Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Hsinli Chemical Industrial is 1.14 times less risky than Maxigen Biotech. The stock trades about -0.03 of its potential returns per unit of risk. The Maxigen Biotech is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,720 in Maxigen Biotech on October 24, 2024 and sell it today you would earn a total of 460.00 from holding Maxigen Biotech or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hsinli Chemical Industrial vs. Maxigen Biotech
Performance |
| Timeline |
| Hsinli Chemical Indu |
| Maxigen Biotech |
Hsinli Chemical and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hsinli Chemical and Maxigen Biotech
The main advantage of trading using opposite Hsinli Chemical and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinli Chemical 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.| Hsinli Chemical vs. Yung Zip Chemical | Hsinli Chemical vs. Mechema Chemicals Int | Hsinli Chemical vs. Tong Hwa Synthetic Fiber | Hsinli Chemical vs. Cathay Chemical Works |
| Maxigen Biotech vs. Shan Loong Transportation Co | Maxigen Biotech vs. Chi Sheng Chemical | Maxigen Biotech vs. Hsinli Chemical Industrial | Maxigen Biotech vs. Silicon Power Computer |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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