Correlation Between Maxim Power and Questor Technology
Can any of the company-specific risk be diversified away by investing in both Maxim Power and Questor Technology 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 Maxim Power and Questor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxim Power Corp and Questor Technology, you can compare the effects of market volatilities on Maxim Power and Questor Technology 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 Maxim Power with a short position of Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxim Power and Questor Technology.
Diversification Opportunities for Maxim Power and Questor Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maxim and Questor is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Maxim Power Corp and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology and Maxim Power 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 Maxim Power Corp are associated (or correlated) with Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of Maxim Power i.e., Maxim Power and Questor Technology go up and down completely randomly.
Pair Corralation between Maxim Power and Questor Technology
Assuming the 90 days trading horizon Maxim Power Corp is expected to generate 1.05 times more return on investment than Questor Technology. However, Maxim Power is 1.05 times more volatile than Questor Technology. It trades about 0.31 of its potential returns per unit of risk. Questor Technology is currently generating about -0.45 per unit of risk. If you would invest 379.00 in Maxim Power Corp on August 27, 2024 and sell it today you would earn a total of 106.00 from holding Maxim Power Corp or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maxim Power Corp vs. Questor Technology
Performance |
| Timeline |
| Maxim Power Corp |
| Questor Technology |
Maxim Power and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxim Power and Questor Technology
The main advantage of trading using opposite Maxim Power and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxim Power position performs unexpectedly, Questor Technology 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| Maxim Power vs. Caldwell Partners International | Maxim Power vs. Chesswood Group Limited | Maxim Power vs. Mccoy Global | Maxim Power vs. Pulse Seismic |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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