Correlation Between Maccura Biotechnology and CGN Nuclear

Can any of the company-specific risk be diversified away by investing in both Maccura Biotechnology and CGN Nuclear 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 CGN Nuclear 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 CGN Nuclear Technology, you can compare the effects of market volatilities on Maccura Biotechnology and CGN Nuclear 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 CGN Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maccura Biotechnology and CGN Nuclear.

Diversification Opportunities for Maccura Biotechnology and CGN Nuclear

0.86

Correlation Coefficient

Maccura Biotechnology  CGN Nuclear

Very poor diversification

The 3 months correlation between Maccura and CGN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology Co and CGN Nuclear Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGN Nuclear Technology 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 CGN Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGN Nuclear Technology has no effect on the direction of Maccura Biotechnology i.e., Maccura Biotechnology and CGN Nuclear go up and down completely randomly.

Pair Corralation between Maccura Biotechnology and CGN Nuclear

Assuming the 90 days trading horizon Maccura Biotechnology is expected to generate 1.22 times less return on investment than CGN Nuclear. In addition to that, Maccura Biotechnology is 1.21 times more volatile than CGN Nuclear Technology. It trades about 0.14 of its total potential returns per unit of risk. CGN Nuclear Technology is currently generating about 0.21 per unit of volatility. If you would invest  578.00  in CGN Nuclear Technology on September 15, 2024 and sell it today you would earn a total of  207.00  from holding CGN Nuclear Technology or generate 35.81% return on investment over 90 days.

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

Maccura Biotechnology Co  vs.  CGN Nuclear Technology

Maccura Biotechnology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maccura Biotechnology Co are ranked lower than 11 (%) 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.

CGN Nuclear Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CGN Nuclear Technology are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CGN Nuclear sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maccura Biotechnology and CGN Nuclear

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

The idea behind Maccura Biotechnology Co and CGN Nuclear Technology 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.