Correlation Between Waters and MAIA Biotechnology

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

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

Diversification Opportunities for Waters and MAIA Biotechnology

0.18

Correlation Coefficient

Waters  MAIA Biotechnology

Average diversification

The 3 months correlation between Waters and MAIA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Waters and MAIA Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAIA Biotechnology and Waters 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 Waters are associated (or correlated) with MAIA Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAIA Biotechnology has no effect on the direction of Waters i.e., Waters and MAIA Biotechnology go up and down completely randomly.

Pair Corralation between Waters and MAIA Biotechnology

Considering the 90-day investment horizon Waters is expected to generate 0.4 times more return on investment than MAIA Biotechnology. However, Waters is 2.5 times less risky than MAIA Biotechnology. It trades about 0.0 of its potential returns per unit of risk. MAIA Biotechnology is currently generating about -0.07 per unit of risk. If you would invest  37,460  in Waters on December 27, 2024 and sell it today you would lose (295.00) from holding Waters or give up 0.79% of portfolio value over 90 days.

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

Waters  vs.  MAIA Biotechnology

Waters

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Waters is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MAIA Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAIA Biotechnology 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 forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Waters and MAIA Biotechnology

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

The idea behind Waters and MAIA Biotechnology 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.