Correlation Between Maximus and Alight
Can any of the company-specific risk be diversified away by investing in both Maximus and Alight 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 Maximus and Alight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maximus and Alight Inc, you can compare the effects of market volatilities on Maximus and Alight 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 Maximus with a short position of Alight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maximus and Alight.
Diversification Opportunities for Maximus and Alight
Very good diversification
The 3 months correlation between Maximus and Alight is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Maximus and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Maximus 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 Maximus are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Maximus i.e., Maximus and Alight go up and down completely randomly.
Pair Corralation between Maximus and Alight
Considering the 90-day investment horizon Maximus is expected to under-perform the Alight. But the stock apears to be less risky and, when comparing its historical volatility, Maximus is 1.57 times less risky than Alight. The stock trades about -0.29 of its potential returns per unit of risk. The Alight Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 718.00 in Alight Inc on August 28, 2024 and sell it today you would earn a total of 91.00 from holding Alight Inc or generate 12.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maximus vs. Alight Inc
Performance |
| Timeline |
| Maximus |
| Alight Inc |
Maximus and Alight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maximus and Alight
The main advantage of trading using opposite Maximus and Alight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maximus position performs unexpectedly, Alight 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 Alight will offset losses from the drop in Alight's long position.| Maximus vs. Oneconnect Financial Technology | Maximus vs. Global Business Travel | Maximus vs. Alight Inc | Maximus vs. CS Disco LLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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