Correlation Between Yung Zip and Maxigen Biotech

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

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

Diversification Opportunities for Yung Zip and Maxigen Biotech

-0.22

Correlation Coefficient

Yung Zip  Maxigen Biotech

Very good diversification

The 3 months correlation between Yung and Maxigen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Yung Zip Chemical and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and Yung Zip 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 Yung Zip Chemical are associated (or correlated) with Maxigen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxigen Biotech has no effect on the direction of Yung Zip i.e., Yung Zip and Maxigen Biotech go up and down completely randomly.

Pair Corralation between Yung Zip and Maxigen Biotech

Assuming the 90 days trading horizon Yung Zip Chemical is expected to under-perform the Maxigen Biotech. In addition to that, Yung Zip is 1.14 times more volatile than Maxigen Biotech. It trades about -0.22 of its total potential returns per unit of risk. Maxigen Biotech is currently generating about 0.12 per unit of volatility. If you would invest  4,420  in Maxigen Biotech on September 13, 2024 and sell it today you would earn a total of  445.00  from holding Maxigen Biotech or generate 10.07% return on investment over 90 days.

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

Yung Zip Chemical  vs.  Maxigen Biotech

Yung Zip Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yung Zip Chemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Maxigen Biotech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maxigen Biotech are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Maxigen Biotech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yung Zip and Maxigen Biotech

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

The idea behind Yung Zip Chemical and Maxigen Biotech 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.