Correlation Between MAIA Biotechnology and Passage Bio
Can any of the company-specific risk be diversified away by investing in both MAIA Biotechnology and Passage Bio 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 MAIA Biotechnology and Passage Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAIA Biotechnology and Passage Bio, you can compare the effects of market volatilities on MAIA Biotechnology and Passage Bio 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 MAIA Biotechnology with a short position of Passage Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAIA Biotechnology and Passage Bio.
Diversification Opportunities for MAIA Biotechnology and Passage Bio
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAIA and Passage is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding MAIA Biotechnology and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio and MAIA Biotechnology 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 MAIA Biotechnology are associated (or correlated) with Passage Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passage Bio has no effect on the direction of MAIA Biotechnology i.e., MAIA Biotechnology and Passage Bio go up and down completely randomly.
Pair Corralation between MAIA Biotechnology and Passage Bio
Given the investment horizon of 90 days MAIA Biotechnology is expected to under-perform the Passage Bio. But the stock apears to be less risky and, when comparing its historical volatility, MAIA Biotechnology is 1.42 times less risky than Passage Bio. The stock trades about -0.06 of its potential returns per unit of risk. The Passage Bio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Passage Bio on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Passage Bio or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAIA Biotechnology vs. Passage Bio
Performance |
| Timeline |
| MAIA Biotechnology |
| Passage Bio |
MAIA Biotechnology and Passage Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAIA Biotechnology and Passage Bio
The main advantage of trading using opposite MAIA Biotechnology and Passage Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAIA Biotechnology position performs unexpectedly, Passage Bio 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 Passage Bio will offset losses from the drop in Passage Bio's long position.| MAIA Biotechnology vs. Lineage Cell Therapeutics | MAIA Biotechnology vs. Armata Pharmaceuticals | MAIA Biotechnology vs. Portage Biotech | MAIA Biotechnology vs. Larimar Therapeutics |
| Passage Bio vs. Bright Minds Biosciences | Passage Bio vs. HP Inc | Passage Bio vs. Intel | Passage Bio vs. Chevron Corp |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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