Correlation Between Ruentex Development and Maxigen Biotech
Can any of the company-specific risk be diversified away by investing in both Ruentex Development 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 Ruentex Development and Maxigen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ruentex Development Co and Maxigen Biotech, you can compare the effects of market volatilities on Ruentex Development 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 Ruentex Development with a short position of Maxigen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ruentex Development and Maxigen Biotech.
Diversification Opportunities for Ruentex Development and Maxigen Biotech
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ruentex and Maxigen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ruentex Development Co and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Ruentex Development 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 Ruentex Development Co 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 Ruentex Development i.e., Ruentex Development and Maxigen Biotech go up and down completely randomly.
Pair Corralation between Ruentex Development and Maxigen Biotech
Assuming the 90 days trading horizon Ruentex Development Co is expected to under-perform the Maxigen Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Ruentex Development Co is 1.48 times less risky than Maxigen Biotech. The stock trades about -0.06 of its potential returns per unit of risk. The Maxigen Biotech is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 4,290 in Maxigen Biotech on September 14, 2024 and sell it today you would earn a total of 550.00 from holding Maxigen Biotech or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ruentex Development Co vs. Maxigen Biotech
Performance |
| Timeline |
| Ruentex Development |
| Maxigen Biotech |
Ruentex Development and Maxigen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ruentex Development and Maxigen Biotech
The main advantage of trading using opposite Ruentex Development and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ruentex Development 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.| Ruentex Development vs. Ruentex Industries | Ruentex Development vs. Pou Chen Corp | Ruentex Development vs. Fubon Financial Holding | Ruentex Development vs. Cathay Financial Holding |
| Maxigen Biotech vs. V Tac Technology Co | Maxigen Biotech vs. Asmedia Technology | Maxigen Biotech vs. Arbor Technology | Maxigen Biotech vs. Chernan Metal Industrial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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