Correlation Between Hsinjing Holding and Maxigen Biotech

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

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

Diversification Opportunities for Hsinjing Holding and Maxigen Biotech

-0.63

Correlation Coefficient

Hsinjing Holding  Maxigen Biotech

Excellent diversification

The 3 months correlation between Hsinjing and Maxigen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hsinjing Holding Co and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Hsinjing Holding 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 Hsinjing Holding Co 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 Hsinjing Holding i.e., Hsinjing Holding and Maxigen Biotech go up and down completely randomly.

Pair Corralation between Hsinjing Holding and Maxigen Biotech

Assuming the 90 days trading horizon Hsinjing Holding Co is expected to under-perform the Maxigen Biotech. In addition to that, Hsinjing Holding is 1.41 times more volatile than Maxigen Biotech. It trades about -0.06 of its total potential returns per unit of risk. Maxigen Biotech is currently generating about 0.35 per unit of volatility. If you would invest  4,595  in Maxigen Biotech on October 10, 2024 and sell it today you would earn a total of  575.00  from holding Maxigen Biotech or generate 12.51% return on investment over 90 days.

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

Hsinjing Holding Co  vs.  Maxigen Biotech

Hsinjing Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hsinjing Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hsinjing Holding 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

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Maxigen Biotech are ranked lower than 18 (%) 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 Hsinjing Holding and Maxigen Biotech

The main advantage of trading using opposite Hsinjing Holding and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hsinjing Holding 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 Hsinjing Holding Co 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.