Correlation Between Guangzhou Haige and Maxvision Technology

Can any of the company-specific risk be diversified away by investing in both Guangzhou Haige and Maxvision 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 Guangzhou Haige and Maxvision Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guangzhou Haige Communications and Maxvision Technology Corp, you can compare the effects of market volatilities on Guangzhou Haige and Maxvision 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 Guangzhou Haige with a short position of Maxvision Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Maxvision Technology.

Diversification Opportunities for Guangzhou Haige and Maxvision Technology

0.68

Correlation Coefficient

Guangzhou Haige  Maxvision Technology

Poor diversification

The 3 months correlation between Guangzhou and Maxvision is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Maxvision Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxvision Technology Corp and Guangzhou Haige 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 Guangzhou Haige Communications are associated (or correlated) with Maxvision Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxvision Technology Corp has no effect on the direction of Guangzhou Haige i.e., Guangzhou Haige and Maxvision Technology go up and down completely randomly.

Pair Corralation between Guangzhou Haige and Maxvision Technology

Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to under-perform the Maxvision Technology. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Haige Communications is 1.46 times less risky than Maxvision Technology. The stock trades about -0.39 of its potential returns per unit of risk. The Maxvision Technology Corp is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  2,545  in Maxvision Technology Corp on October 17, 2024 and sell it today you would lose (252.00) from holding Maxvision Technology Corp or give up 9.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Guangzhou Haige Communications  vs.  Maxvision Technology Corp

Guangzhou Haige Comm

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guangzhou Haige Communications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guangzhou Haige is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Maxvision Technology Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maxvision Technology Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maxvision Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guangzhou Haige and Maxvision Technology

The main advantage of trading using opposite Guangzhou Haige and Maxvision Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige position performs unexpectedly, Maxvision 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 Maxvision Technology will offset losses from the drop in Maxvision Technology's long position.

The idea behind Guangzhou Haige Communications and Maxvision Technology Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.