Correlation Between Artemis Gold and Maxtech Ventures

Can any of the company-specific risk be diversified away by investing in both Artemis Gold and Maxtech Ventures 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 Artemis Gold and Maxtech Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Artemis Gold and Maxtech Ventures

0.17

Correlation Coefficient

Artemis Gold  Maxtech Ventures

Average diversification

The 3 months correlation between Artemis and Maxtech is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Artemis Gold and Maxtech Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxtech Ventures and Artemis Gold 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 Artemis Gold are associated (or correlated) with Maxtech Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxtech Ventures has no effect on the direction of Artemis Gold i.e., Artemis Gold and Maxtech Ventures go up and down completely randomly.

Pair Corralation between Artemis Gold and Maxtech Ventures

Assuming the 90 days horizon Artemis Gold is expected to generate 3.08 times less return on investment than Maxtech Ventures. But when comparing it to its historical volatility, Artemis Gold is 3.23 times less risky than Maxtech Ventures. It trades about 0.04 of its potential returns per unit of risk. Maxtech Ventures is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9.80  in Maxtech Ventures on September 15, 2024 and sell it today you would lose (0.30) from holding Maxtech Ventures or give up 3.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	56.25%
Values	Daily Returns

Artemis Gold  vs.  Maxtech Ventures

Artemis Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artemis Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Artemis Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Maxtech Ventures

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Maxtech Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical indicators, Maxtech Ventures reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artemis Gold and Maxtech Ventures

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

The idea behind Artemis Gold and Maxtech Ventures 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.