Correlation Between Maccura Biotechnology and Juewei Food

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

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

Diversification Opportunities for Maccura Biotechnology and Juewei Food

0.65

Correlation Coefficient

Maccura Biotechnology  Juewei Food

Poor diversification

The 3 months correlation between Maccura and Juewei is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology Co and Juewei Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juewei Food and Maccura Biotechnology 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 Maccura Biotechnology Co are associated (or correlated) with Juewei Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juewei Food has no effect on the direction of Maccura Biotechnology i.e., Maccura Biotechnology and Juewei Food go up and down completely randomly.

Pair Corralation between Maccura Biotechnology and Juewei Food

Assuming the 90 days trading horizon Maccura Biotechnology Co is expected to under-perform the Juewei Food. But the stock apears to be less risky and, when comparing its historical volatility, Maccura Biotechnology Co is 1.64 times less risky than Juewei Food. The stock trades about -0.03 of its potential returns per unit of risk. The Juewei Food Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,703  in Juewei Food Co on September 29, 2024 and sell it today you would lose (6.00) from holding Juewei Food Co or give up 0.35% of portfolio value over 90 days.

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

Maccura Biotechnology Co  vs.  Juewei Food Co

Maccura Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maccura Biotechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Maccura Biotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Juewei Food

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juewei Food Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Juewei Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Maccura Biotechnology and Juewei Food

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

The idea behind Maccura Biotechnology Co and Juewei Food 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.