Correlation Between Waters and Mainz Biomed

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

By analyzing existing cross correlation between Waters and Mainz Biomed BV, you can compare the effects of market volatilities on Waters and Mainz Biomed 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 Mainz Biomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waters and Mainz Biomed.

Diversification Opportunities for Waters and Mainz Biomed

0.39

Correlation Coefficient

Waters  Mainz Biomed

Weak diversification

The 3 months correlation between Waters and Mainz is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Waters and Mainz Biomed BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainz Biomed BV 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 Mainz Biomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainz Biomed BV has no effect on the direction of Waters i.e., Waters and Mainz Biomed go up and down completely randomly.

Pair Corralation between Waters and Mainz Biomed

Considering the 90-day investment horizon Waters is expected to under-perform the Mainz Biomed. But the stock apears to be less risky and, when comparing its historical volatility, Waters is 4.18 times less risky than Mainz Biomed. The stock trades about 0.0 of its potential returns per unit of risk. The Mainz Biomed BV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  456.00  in Mainz Biomed BV on December 28, 2024 and sell it today you would lose (59.00) from holding Mainz Biomed BV or give up 12.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Waters  vs.  Mainz Biomed BV

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.

Mainz Biomed BV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mainz Biomed BV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Mainz Biomed is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Waters and Mainz Biomed

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

The idea behind Waters and Mainz Biomed BV 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.