Correlation Between Shenzhen Silver and Maxvision Technology

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

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

Diversification Opportunities for Shenzhen Silver and Maxvision Technology

0.16

Correlation Coefficient

Shenzhen Silver  Maxvision Technology

Average diversification

The 3 months correlation between Shenzhen and Maxvision is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Silver Basis 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 Shenzhen Silver 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 Shenzhen Silver Basis 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 Shenzhen Silver i.e., Shenzhen Silver and Maxvision Technology go up and down completely randomly.

Pair Corralation between Shenzhen Silver and Maxvision Technology

Assuming the 90 days trading horizon Shenzhen Silver Basis is expected to under-perform the Maxvision Technology. But the stock apears to be less risky and, when comparing its historical volatility, Shenzhen Silver Basis is 1.12 times less risky than Maxvision Technology. The stock trades about -0.49 of its potential returns per unit of risk. The Maxvision Technology Corp is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest  2,628  in Maxvision Technology Corp on October 14, 2024 and sell it today you would lose (445.00) from holding Maxvision Technology Corp or give up 16.93% of portfolio value over 90 days.

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

Shenzhen Silver Basis  vs.  Maxvision Technology Corp

Shenzhen Silver Basis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shenzhen Silver Basis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Maxvision Technology Corp

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Shenzhen Silver and Maxvision Technology

The main advantage of trading using opposite Shenzhen Silver and Maxvision Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Silver 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 Shenzhen Silver Basis 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.