Correlation Between Wistron NeWeb and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Wistron NeWeb 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 Wistron NeWeb and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wistron NeWeb Corp and Maxigen Biotech, you can compare the effects of market volatilities on Wistron NeWeb 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 Wistron NeWeb with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wistron NeWeb and Maxigen Biotech.
Diversification Opportunities for Wistron NeWeb and Maxigen Biotech
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wistron and Maxigen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Wistron NeWeb Corp and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Wistron NeWeb 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 Wistron NeWeb Corp 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 Wistron NeWeb i.e., Wistron NeWeb and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Wistron NeWeb and Maxigen Biotech
Assuming the 90 days trading horizon Wistron NeWeb Corp is expected to under-perform the Maxigen Biotech. In addition to that, Wistron NeWeb is 1.89 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 0.07 per unit of volatility. If you would invest 4,280 in Maxigen Biotech on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Maxigen Biotech or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wistron NeWeb Corp vs. Maxigen Biotech
Performance |
| Timeline |
| Wistron NeWeb Corp |
| Maxigen Biotech |
Wistron NeWeb and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wistron NeWeb and Maxigen Biotech
The main advantage of trading using opposite Wistron NeWeb and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wistron NeWeb 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.| Wistron NeWeb vs. Maxigen Biotech | Wistron NeWeb vs. Wistron Information Technology | Wistron NeWeb vs. Ichia Technologies | Wistron NeWeb vs. Univacco Technology |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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