Correlation Between Wholetech System and Maxigen Biotech

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

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

Diversification Opportunities for Wholetech System and Maxigen Biotech

0.49

Correlation Coefficient

Wholetech System  Maxigen Biotech

Very weak diversification

The 3 months correlation between Wholetech and Maxigen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wholetech System Hitech and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Wholetech System 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 Wholetech System Hitech 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 Wholetech System i.e., Wholetech System and Maxigen Biotech go up and down completely randomly.

Pair Corralation between Wholetech System and Maxigen Biotech

Assuming the 90 days trading horizon Wholetech System Hitech is expected to under-perform the Maxigen Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Wholetech System Hitech is 1.85 times less risky than Maxigen Biotech. The stock trades about -0.01 of its potential returns per unit of risk. The Maxigen Biotech is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,070  in Maxigen Biotech on December 2, 2024 and sell it today you would earn a total of  200.00  from holding Maxigen Biotech or generate 3.94% return on investment over 90 days.

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

Wholetech System Hitech  vs.  Maxigen Biotech

Wholetech System Hitech

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wholetech System Hitech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Wholetech System 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

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.

Pair Trading with Wholetech System and Maxigen Biotech

The main advantage of trading using opposite Wholetech System and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wholetech System 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 Wholetech System Hitech 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.