Correlation Between Wisekey International and MaxLinear

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Can any of the company-specific risk be diversified away by investing in both Wisekey International and MaxLinear 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 Wisekey International and MaxLinear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisekey International Holding and MaxLinear, you can compare the effects of market volatilities on Wisekey International and MaxLinear 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 Wisekey International with a short position of MaxLinear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and MaxLinear.

Diversification Opportunities for Wisekey International and MaxLinear

WisekeyMaxLinearDiversified AwayWisekeyMaxLinearDiversified Away100%
0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Wisekey and MaxLinear is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and MaxLinear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxLinear and Wisekey International 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 Wisekey International Holding are associated (or correlated) with MaxLinear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxLinear has no effect on the direction of Wisekey International i.e., Wisekey International and MaxLinear go up and down completely randomly.

Pair Corralation between Wisekey International and MaxLinear

Given the investment horizon of 90 days Wisekey International Holding is expected to generate 4.49 times more return on investment than MaxLinear. However, Wisekey International is 4.49 times more volatile than MaxLinear. It trades about 0.16 of its potential returns per unit of risk. MaxLinear is currently generating about 0.12 per unit of risk. If you would invest  212.00  in Wisekey International Holding on September 22, 2024 and sell it today you would earn a total of  487.00  from holding Wisekey International Holding or generate 229.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Wisekey International Holding  vs.  MaxLinear

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 050100150200250
JavaScript chart by amCharts 3.21.15WKEY MXL
       Timeline  
Wisekey International 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Wisekey International Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Wisekey International showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2468101214
MaxLinear 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, MaxLinear disclosed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec14161820

Wisekey International and MaxLinear Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-60.93-45.63-30.34-15.040.015.6732.1748.6765.1781.67 0.0050.0100.0150.020
JavaScript chart by amCharts 3.21.15WKEY MXL
       Returns  

Pair Trading with Wisekey International and MaxLinear

The main advantage of trading using opposite Wisekey International and MaxLinear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International position performs unexpectedly, MaxLinear 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 MaxLinear will offset losses from the drop in MaxLinear's long position.
The idea behind Wisekey International Holding and MaxLinear 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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