Correlation Between SciVision Biotech and Maxigen Biotech

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

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

Diversification Opportunities for SciVision Biotech and Maxigen Biotech

0.07

Correlation Coefficient

SciVision Biotech  Maxigen Biotech

Significant diversification

The 3 months correlation between SciVision and Maxigen is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SciVision Biotech and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and SciVision 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 SciVision Biotech are associated (or correlated) with Maxigen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxigen Biotech has no effect on the direction of SciVision Biotech i.e., SciVision Biotech and Maxigen Biotech go up and down completely randomly.

Pair Corralation between SciVision Biotech and Maxigen Biotech

Assuming the 90 days trading horizon SciVision Biotech is expected to generate 1.14 times more return on investment than Maxigen Biotech. However, SciVision Biotech is 1.14 times more volatile than Maxigen Biotech. It trades about 0.08 of its potential returns per unit of risk. Maxigen Biotech is currently generating about 0.02 per unit of risk. If you would invest  5,290  in SciVision Biotech on October 13, 2024 and sell it today you would earn a total of  6,010  from holding SciVision Biotech or generate 113.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

SciVision Biotech  vs.  Maxigen Biotech

SciVision Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SciVision Biotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SciVision Biotech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Maxigen Biotech

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Maxigen Biotech are ranked lower than 17 (%) 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.

Pair Trading with SciVision Biotech and Maxigen Biotech

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

The idea behind SciVision Biotech and Maxigen Biotech 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.