Correlation Between Mauna Kea and Acticor Biotech
Can any of the company-specific risk be diversified away by investing in both Mauna Kea and Acticor 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 Mauna Kea and Acticor Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauna Kea Technologies and Acticor Biotech SAS, you can compare the effects of market volatilities on Mauna Kea and Acticor 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 Mauna Kea with a short position of Acticor Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauna Kea and Acticor Biotech.
Diversification Opportunities for Mauna Kea and Acticor Biotech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mauna and Acticor is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and Acticor Biotech SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acticor Biotech SAS and Mauna Kea 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 Mauna Kea Technologies are associated (or correlated) with Acticor Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acticor Biotech SAS has no effect on the direction of Mauna Kea i.e., Mauna Kea and Acticor Biotech go up and down completely randomly.
Pair Corralation between Mauna Kea and Acticor Biotech
Assuming the 90 days trading horizon Mauna Kea Technologies is expected to under-perform the Acticor Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Mauna Kea Technologies is 4.02 times less risky than Acticor Biotech. The stock trades about -0.37 of its potential returns per unit of risk. The Acticor Biotech SAS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Acticor Biotech SAS on September 5, 2024 and sell it today you would lose (29.00) from holding Acticor Biotech SAS or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Mauna Kea Technologies vs. Acticor Biotech SAS
Performance |
| Timeline |
| Mauna Kea Technologies |
| Acticor Biotech SAS |
Mauna Kea and Acticor Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauna Kea and Acticor Biotech
The main advantage of trading using opposite Mauna Kea and Acticor Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea position performs unexpectedly, Acticor 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 Acticor Biotech will offset losses from the drop in Acticor Biotech's long position.| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF SA |
| Acticor Biotech vs. Spineguard | Acticor Biotech vs. Vallourec | Acticor Biotech vs. Manitou BF SA | Acticor Biotech vs. Ossiam Minimum Variance |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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