Correlation Between SynCore Biotechnology and Maxigen Biotech

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

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

Diversification Opportunities for SynCore Biotechnology and Maxigen Biotech

-0.68

Correlation Coefficient

SynCore Biotechnology  Maxigen Biotech

Excellent diversification

The 3 months correlation between SynCore and Maxigen is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SynCore Biotechnology Co and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and SynCore 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 SynCore Biotechnology 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 SynCore Biotechnology i.e., SynCore Biotechnology and Maxigen Biotech go up and down completely randomly.

Pair Corralation between SynCore Biotechnology and Maxigen Biotech

Assuming the 90 days trading horizon SynCore Biotechnology Co is expected to under-perform the Maxigen Biotech. In addition to that, SynCore Biotechnology is 2.02 times more volatile than Maxigen Biotech. It trades about -0.01 of its total potential returns per unit of risk. Maxigen Biotech is currently generating about 0.17 per unit of volatility. If you would invest  4,245  in Maxigen Biotech on October 25, 2024 and sell it today you would earn a total of  785.00  from holding Maxigen Biotech or generate 18.49% return on investment over 90 days.

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

SynCore Biotechnology Co  vs.  Maxigen Biotech

SynCore Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

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

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maxigen Biotech are ranked lower than 13 (%) 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 SynCore Biotechnology and Maxigen Biotech

The main advantage of trading using opposite SynCore Biotechnology and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SynCore Biotechnology 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 SynCore Biotechnology 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.