Correlation Between Now and MAIA Biotechnology
Can any of the company-specific risk be diversified away by investing in both Now 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 Now and MAIA Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Inc and MAIA Biotechnology, you can compare the effects of market volatilities on Now 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 Now with a short position of MAIA Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and MAIA Biotechnology.
Diversification Opportunities for Now and MAIA Biotechnology
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Now and MAIA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and MAIA Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAIA Biotechnology and Now 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 Now Inc 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 Now i.e., Now and MAIA Biotechnology go up and down completely randomly.
Pair Corralation between Now and MAIA Biotechnology
Given the investment horizon of 90 days Now Inc is expected to generate 0.4 times more return on investment than MAIA Biotechnology. However, Now Inc is 2.49 times less risky than MAIA Biotechnology. It trades about 0.01 of its potential returns per unit of risk. MAIA Biotechnology is currently generating about 0.0 per unit of risk. If you would invest 1,466 in Now Inc on November 4, 2024 and sell it today you would earn a total of 22.00 from holding Now Inc or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Now Inc vs. MAIA Biotechnology
Performance |
| Timeline |
| Now Inc |
| MAIA Biotechnology |
Now and MAIA Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now and MAIA Biotechnology
The main advantage of trading using opposite Now and MAIA Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now 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.| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Enerflex |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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