Correlation Between Maxvision Technology and Shandong Homey

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

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

Diversification Opportunities for Maxvision Technology and Shandong Homey

0.21

Correlation Coefficient

Maxvision Technology  Shandong Homey

Modest diversification

The 3 months correlation between Maxvision and Shandong is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Maxvision Technology Corp and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic and Maxvision Technology 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 Maxvision Technology Corp are associated (or correlated) with Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of Maxvision Technology i.e., Maxvision Technology and Shandong Homey go up and down completely randomly.

Pair Corralation between Maxvision Technology and Shandong Homey

Assuming the 90 days trading horizon Maxvision Technology Corp is expected to generate 1.18 times more return on investment than Shandong Homey. However, Maxvision Technology is 1.18 times more volatile than Shandong Homey Aquatic. It trades about 0.17 of its potential returns per unit of risk. Shandong Homey Aquatic is currently generating about -0.03 per unit of risk. If you would invest  2,384  in Maxvision Technology Corp on November 28, 2024 and sell it today you would earn a total of  898.00  from holding Maxvision Technology Corp or generate 37.67% return on investment over 90 days.

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

Maxvision Technology Corp  vs.  Shandong Homey Aquatic

Maxvision Technology Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maxvision Technology Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maxvision Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Shandong Homey Aquatic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shandong Homey Aquatic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Maxvision Technology and Shandong Homey

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

The idea behind Maxvision Technology Corp and Shandong Homey Aquatic 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.