Correlation Between Maxwell Resource and Adcore

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

By analyzing existing cross correlation between Maxwell Resource and Adcore Inc, you can compare the effects of market volatilities on Maxwell Resource and Adcore 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 Maxwell Resource with a short position of Adcore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxwell Resource and Adcore.

Diversification Opportunities for Maxwell Resource and Adcore

-0.47

Correlation Coefficient

Maxwell Resource  Adcore

Very good diversification

The 3 months correlation between Maxwell and Adcore is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Maxwell Resource and Adcore Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adcore Inc and Maxwell Resource 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 Maxwell Resource are associated (or correlated) with Adcore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adcore Inc has no effect on the direction of Maxwell Resource i.e., Maxwell Resource and Adcore go up and down completely randomly.

Pair Corralation between Maxwell Resource and Adcore

Given the investment horizon of 90 days Maxwell Resource is expected to generate 3.23 times less return on investment than Adcore. In addition to that, Maxwell Resource is 2.65 times more volatile than Adcore Inc. It trades about 0.02 of its total potential returns per unit of risk. Adcore Inc is currently generating about 0.15 per unit of volatility. If you would invest  11.00  in Adcore Inc on December 29, 2024 and sell it today you would earn a total of  9.00  from holding Adcore Inc or generate 81.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Maxwell Resource  vs.  Adcore Inc

Maxwell Resource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Maxwell Resource are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Maxwell Resource unveiled solid returns over the last few months and may actually be approaching a breakup point.

Adcore Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adcore Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adcore reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maxwell Resource and Adcore

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

The idea behind Maxwell Resource and Adcore Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .