Correlation Between Awakn Life and MAIA Biotechnology

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Can any of the company-specific risk be diversified away by investing in both Awakn Life and MAIA Biotechnology 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 Awakn Life and MAIA Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awakn Life Sciences and MAIA Biotechnology, you can compare the effects of market volatilities on Awakn Life and MAIA Biotechnology 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 Awakn Life with a short position of MAIA Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awakn Life and MAIA Biotechnology.

Diversification Opportunities for Awakn Life and MAIA Biotechnology

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Awakn and MAIA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Awakn Life Sciences and MAIA Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAIA Biotechnology and Awakn Life 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 Awakn Life Sciences are associated (or correlated) with MAIA Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAIA Biotechnology has no effect on the direction of Awakn Life i.e., Awakn Life and MAIA Biotechnology go up and down completely randomly.

Pair Corralation between Awakn Life and MAIA Biotechnology

Assuming the 90 days horizon Awakn Life Sciences is expected to under-perform the MAIA Biotechnology. But the pink sheet apears to be less risky and, when comparing its historical volatility, Awakn Life Sciences is 1.14 times less risky than MAIA Biotechnology. The pink sheet trades about -0.13 of its potential returns per unit of risk. The MAIA Biotechnology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  209.00  in MAIA Biotechnology on October 26, 2024 and sell it today you would lose (16.00) from holding MAIA Biotechnology or give up 7.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Awakn Life Sciences  vs.  MAIA Biotechnology

 Performance 
       Timeline  
Awakn Life Sciences 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Awakn Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
MAIA Biotechnology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MAIA Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Awakn Life and MAIA Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Awakn Life and MAIA Biotechnology

The main advantage of trading using opposite Awakn Life and MAIA Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awakn Life position performs unexpectedly, MAIA Biotechnology 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 MAIA Biotechnology will offset losses from the drop in MAIA Biotechnology's long position.
The idea behind Awakn Life Sciences and MAIA Biotechnology 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.
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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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