Correlation Between Voltronic Power and Maxigen Biotech

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Voltronic Power 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 Voltronic Power and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voltronic Power Technology and Maxigen Biotech, you can compare the effects of market volatilities on Voltronic Power 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 Voltronic Power with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltronic Power and Maxigen Biotech.

Diversification Opportunities for Voltronic Power and Maxigen Biotech

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Voltronic and Maxigen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Voltronic Power Technology and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Voltronic Power 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 Voltronic Power 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 Voltronic Power i.e., Voltronic Power and Maxigen Biotech go up and down completely randomly.

Pair Corralation between Voltronic Power and Maxigen Biotech

Assuming the 90 days trading horizon Voltronic Power Technology is expected to generate 1.09 times more return on investment than Maxigen Biotech. However, Voltronic Power is 1.09 times more volatile than Maxigen Biotech. It trades about 0.11 of its potential returns per unit of risk. Maxigen Biotech is currently generating about 0.02 per unit of risk. If you would invest  183,500  in Voltronic Power Technology on November 4, 2024 and sell it today you would earn a total of  7,000  from holding Voltronic Power Technology or generate 3.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Voltronic Power Technology  vs.  Maxigen Biotech

 Performance 
       Timeline  
Voltronic Power Tech 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voltronic Power Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Maxigen Biotech 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days Maxigen Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Maxigen Biotech showed solid returns over the last few months and may actually be approaching a breakup point.

Voltronic Power and Maxigen Biotech Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Voltronic Power and Maxigen Biotech

The main advantage of trading using opposite Voltronic Power and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voltronic Power 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.
The idea behind Voltronic Power Technology and Maxigen Biotech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences