Correlation Between Intech Biopharm and Sunmax Biotechnology

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

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

Diversification Opportunities for Intech Biopharm and Sunmax Biotechnology

-0.28

Correlation Coefficient

Intech Biopharm  Sunmax Biotechnology

Very good diversification

The 3 months correlation between Intech and Sunmax is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Intech Biopharm and Sunmax Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunmax Biotechnology and Intech Biopharm 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 Intech Biopharm are associated (or correlated) with Sunmax Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunmax Biotechnology has no effect on the direction of Intech Biopharm i.e., Intech Biopharm and Sunmax Biotechnology go up and down completely randomly.

Pair Corralation between Intech Biopharm and Sunmax Biotechnology

Assuming the 90 days trading horizon Intech Biopharm is expected to under-perform the Sunmax Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Intech Biopharm is 1.16 times less risky than Sunmax Biotechnology. The stock trades about -0.01 of its potential returns per unit of risk. The Sunmax Biotechnology Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  12,446  in Sunmax Biotechnology Co on October 23, 2024 and sell it today you would earn a total of  14,854  from holding Sunmax Biotechnology Co or generate 119.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Intech Biopharm  vs.  Sunmax Biotechnology Co

Intech Biopharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intech Biopharm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sunmax Biotechnology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sunmax Biotechnology Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sunmax Biotechnology is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Intech Biopharm and Sunmax Biotechnology

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

The idea behind Intech Biopharm and Sunmax Biotechnology Co 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.