Correlation Between Maccura Biotechnology and Lander Sports

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

By analyzing existing cross correlation between Maccura Biotechnology Co and Lander Sports Development, you can compare the effects of market volatilities on Maccura Biotechnology and Lander Sports 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 Maccura Biotechnology with a short position of Lander Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maccura Biotechnology and Lander Sports.

Diversification Opportunities for Maccura Biotechnology and Lander Sports

0.7

Correlation Coefficient

Maccura Biotechnology  Lander Sports

Poor diversification

The 3 months correlation between Maccura and Lander is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology Co and Lander Sports Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lander Sports Development and Maccura Biotechnology 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 Maccura Biotechnology Co are associated (or correlated) with Lander Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lander Sports Development has no effect on the direction of Maccura Biotechnology i.e., Maccura Biotechnology and Lander Sports go up and down completely randomly.

Pair Corralation between Maccura Biotechnology and Lander Sports

Assuming the 90 days trading horizon Maccura Biotechnology Co is expected to under-perform the Lander Sports. But the stock apears to be less risky and, when comparing its historical volatility, Maccura Biotechnology Co is 1.25 times less risky than Lander Sports. The stock trades about -0.01 of its potential returns per unit of risk. The Lander Sports Development is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  282.00  in Lander Sports Development on September 16, 2024 and sell it today you would earn a total of  151.00  from holding Lander Sports Development or generate 53.55% return on investment over 90 days.

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

Maccura Biotechnology Co  vs.  Lander Sports Development

Maccura Biotechnology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maccura Biotechnology Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maccura Biotechnology sustained solid returns over the last few months and may actually be approaching a breakup point.

Lander Sports Development

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lander Sports Development are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lander Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maccura Biotechnology and Lander Sports

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

The idea behind Maccura Biotechnology Co and Lander Sports Development 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.