Correlation Between Shaanxi Meineng and Maccura Biotechnology

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shaanxi Meineng and Maccura 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 Shaanxi Meineng and Maccura Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaanxi Meineng Clean and Maccura Biotechnology Co, you can compare the effects of market volatilities on Shaanxi Meineng and Maccura 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 Shaanxi Meineng with a short position of Maccura Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Meineng and Maccura Biotechnology.

Diversification Opportunities for Shaanxi Meineng and Maccura Biotechnology

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Shaanxi and Maccura is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Meineng Clean and Maccura Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maccura Biotechnology and Shaanxi Meineng 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 Shaanxi Meineng Clean are associated (or correlated) with Maccura Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maccura Biotechnology has no effect on the direction of Shaanxi Meineng i.e., Shaanxi Meineng and Maccura Biotechnology go up and down completely randomly.

Pair Corralation between Shaanxi Meineng and Maccura Biotechnology

Assuming the 90 days trading horizon Shaanxi Meineng is expected to generate 1.01 times less return on investment than Maccura Biotechnology. But when comparing it to its historical volatility, Shaanxi Meineng Clean is 1.29 times less risky than Maccura Biotechnology. It trades about 0.2 of its potential returns per unit of risk. Maccura Biotechnology Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,120  in Maccura Biotechnology Co on September 14, 2024 and sell it today you would earn a total of  340.00  from holding Maccura Biotechnology Co or generate 30.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.28%
ValuesDaily Returns

Shaanxi Meineng Clean  vs.  Maccura Biotechnology Co

 Performance 
       Timeline  
Shaanxi Meineng Clean 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Shaanxi Meineng Clean are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shaanxi Meineng sustained solid returns over the last few months and may actually be approaching a breakup point.
Maccura Biotechnology 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Maccura Biotechnology Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maccura Biotechnology sustained solid returns over the last few months and may actually be approaching a breakup point.

Shaanxi Meineng and Maccura Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shaanxi Meineng and Maccura Biotechnology

The main advantage of trading using opposite Shaanxi Meineng and Maccura Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Meineng position performs unexpectedly, Maccura 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 Maccura Biotechnology will offset losses from the drop in Maccura Biotechnology's long position.
The idea behind Shaanxi Meineng Clean and Maccura Biotechnology Co 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios