Correlation Between Maccura Biotechnology and Ningbo MedicalSystem

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

Diversification Opportunities for Maccura Biotechnology and Ningbo MedicalSystem

0.95

Correlation Coefficient

Maccura Biotechnology  Ningbo MedicalSystem

Almost no diversification

The 3 months correlation between Maccura and Ningbo is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology Co and Ningbo MedicalSystem Biotechno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo MedicalSystem 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 Ningbo MedicalSystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo MedicalSystem has no effect on the direction of Maccura Biotechnology i.e., Maccura Biotechnology and Ningbo MedicalSystem go up and down completely randomly.

Pair Corralation between Maccura Biotechnology and Ningbo MedicalSystem

Assuming the 90 days trading horizon Maccura Biotechnology Co is expected to generate 0.81 times more return on investment than Ningbo MedicalSystem. However, Maccura Biotechnology Co is 1.24 times less risky than Ningbo MedicalSystem. It trades about -0.12 of its potential returns per unit of risk. Ningbo MedicalSystem Biotechnology is currently generating about -0.18 per unit of risk. If you would invest  1,401  in Maccura Biotechnology Co on September 25, 2024 and sell it today you would lose (43.00) from holding Maccura Biotechnology Co or give up 3.07% of portfolio value over 90 days.

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

Maccura Biotechnology Co  vs.  Ningbo MedicalSystem Biotechno

Maccura Biotechnology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maccura Biotechnology Co are ranked lower than 7 (%) 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.

Ningbo MedicalSystem

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ningbo MedicalSystem Biotechnology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ningbo MedicalSystem sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maccura Biotechnology and Ningbo MedicalSystem

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

The idea behind Maccura Biotechnology Co and Ningbo MedicalSystem Biotechnology 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.