Correlation Between Maha Energy and ExpreS2ion Biotech

Can any of the company-specific risk be diversified away by investing in both Maha Energy and ExpreS2ion 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 Maha Energy and ExpreS2ion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maha Energy AB and ExpreS2ion Biotech Holding, you can compare the effects of market volatilities on Maha Energy and ExpreS2ion 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 Maha Energy with a short position of ExpreS2ion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maha Energy and ExpreS2ion Biotech.

Diversification Opportunities for Maha Energy and ExpreS2ion Biotech

-0.38

Correlation Coefficient

Maha Energy  ExpreS2ion Biotech

Very good diversification

The 3 months correlation between Maha and ExpreS2ion is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Maha Energy AB and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech and Maha Energy 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 Maha Energy AB are associated (or correlated) with ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of Maha Energy i.e., Maha Energy and ExpreS2ion Biotech go up and down completely randomly.

Pair Corralation between Maha Energy and ExpreS2ion Biotech

Assuming the 90 days trading horizon Maha Energy AB is expected to generate 0.55 times more return on investment than ExpreS2ion Biotech. However, Maha Energy AB is 1.82 times less risky than ExpreS2ion Biotech. It trades about 0.25 of its potential returns per unit of risk. ExpreS2ion Biotech Holding is currently generating about 0.08 per unit of risk. If you would invest  599.00  in Maha Energy AB on October 23, 2024 and sell it today you would earn a total of  69.00  from holding Maha Energy AB or generate 11.52% return on investment over 90 days.

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

Maha Energy AB  vs.  ExpreS2ion Biotech Holding

Maha Energy AB

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maha Energy AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical indicators, Maha Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

ExpreS2ion Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ExpreS2ion Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Maha Energy and ExpreS2ion Biotech

The main advantage of trading using opposite Maha Energy and ExpreS2ion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maha Energy position performs unexpectedly, ExpreS2ion 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 ExpreS2ion Biotech will offset losses from the drop in ExpreS2ion Biotech's long position.

The idea behind Maha Energy AB and ExpreS2ion Biotech Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.