Correlation Between Maxigen Biotech and Intech Biopharm

Can any of the company-specific risk be diversified away by investing in both Maxigen Biotech and Intech Biopharm 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 Maxigen Biotech and Intech Biopharm into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maxigen Biotech and Intech Biopharm, you can compare the effects of market volatilities on Maxigen Biotech and Intech Biopharm 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 Maxigen Biotech with a short position of Intech Biopharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxigen Biotech and Intech Biopharm.

Diversification Opportunities for Maxigen Biotech and Intech Biopharm

-0.63

Correlation Coefficient

Maxigen Biotech  Intech Biopharm

Excellent diversification

The 3 months correlation between Maxigen and Intech is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Maxigen Biotech and Intech Biopharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Biopharm and Maxigen Biotech 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 Maxigen Biotech are associated (or correlated) with Intech Biopharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Biopharm has no effect on the direction of Maxigen Biotech i.e., Maxigen Biotech and Intech Biopharm go up and down completely randomly.

Pair Corralation between Maxigen Biotech and Intech Biopharm

Assuming the 90 days trading horizon Maxigen Biotech is expected to generate 0.96 times more return on investment than Intech Biopharm. However, Maxigen Biotech is 1.05 times less risky than Intech Biopharm. It trades about -0.01 of its potential returns per unit of risk. Intech Biopharm is currently generating about -0.01 per unit of risk. If you would invest  5,990  in Maxigen Biotech on October 27, 2024 and sell it today you would lose (960.00) from holding Maxigen Biotech or give up 16.03% of portfolio value over 90 days.

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

Maxigen Biotech  vs.  Intech Biopharm

Maxigen Biotech

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maxigen Biotech are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Maxigen Biotech showed solid returns over the last few months and may actually be approaching a breakup point.

Intech Biopharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intech Biopharm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Maxigen Biotech and Intech Biopharm

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

The idea behind Maxigen Biotech and Intech Biopharm 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.