Correlation Between WiseChip Semiconductor and Maxigen Biotech

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

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

Diversification Opportunities for WiseChip Semiconductor and Maxigen Biotech

-0.42

Correlation Coefficient

WiseChip Semiconductor  Maxigen Biotech

Very good diversification

The 3 months correlation between WiseChip and Maxigen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Maxigen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxigen Biotech and WiseChip Semiconductor 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 WiseChip Semiconductor 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 WiseChip Semiconductor i.e., WiseChip Semiconductor and Maxigen Biotech go up and down completely randomly.

Pair Corralation between WiseChip Semiconductor and Maxigen Biotech

Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Maxigen Biotech. In addition to that, WiseChip Semiconductor is 1.75 times more volatile than Maxigen Biotech. It trades about -0.02 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	Very Weak
Accuracy	98.41%
Values	Daily Returns

WiseChip Semiconductor  vs.  Maxigen Biotech

WiseChip Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WiseChip Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, WiseChip Semiconductor is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the 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 WiseChip Semiconductor and Maxigen Biotech

The main advantage of trading using opposite WiseChip Semiconductor and Maxigen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor 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 WiseChip Semiconductor 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.