Correlation Between Leatec Fine and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Leatec Fine 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 Leatec Fine and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and Maxigen Biotech, you can compare the effects of market volatilities on Leatec Fine 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 Leatec Fine with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and Maxigen Biotech.
Diversification Opportunities for Leatec Fine and Maxigen Biotech
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leatec and Maxigen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Leatec Fine 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 Leatec Fine Ceramics 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 Leatec Fine i.e., Leatec Fine and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Leatec Fine and Maxigen Biotech
Assuming the 90 days trading horizon Leatec Fine is expected to generate 2.47 times less return on investment than Maxigen Biotech. In addition to that, Leatec Fine is 1.46 times more volatile than Maxigen Biotech. It trades about 0.05 of its total potential returns per unit of risk. Maxigen Biotech is currently generating about 0.17 per unit of volatility. 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 | 90.91% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. Maxigen Biotech
Performance |
| Timeline |
| Leatec Fine Ceramics |
| Maxigen Biotech |
Leatec Fine and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and Maxigen Biotech
The main advantage of trading using opposite Leatec Fine and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine 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.| Leatec Fine vs. First Insurance Co | Leatec Fine vs. Sports Gear Co | Leatec Fine vs. Evergreen International Storage | Leatec Fine vs. Information Technology Total |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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