Correlation Between Global Business and Maximus

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

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

Diversification Opportunities for Global Business and Maximus

-0.88

Correlation Coefficient

Global Business  Maximus

Pay attention - limited upside

The 3 months correlation between Global and Maximus is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Global Business Travel and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus and Global Business 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 Global Business Travel are associated (or correlated) with Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Global Business i.e., Global Business and Maximus go up and down completely randomly.

Pair Corralation between Global Business and Maximus

Given the investment horizon of 90 days Global Business Travel is expected to generate 1.25 times more return on investment than Maximus. However, Global Business is 1.25 times more volatile than Maximus. It trades about 0.15 of its potential returns per unit of risk. Maximus is currently generating about -0.18 per unit of risk. If you would invest  746.00  in Global Business Travel on September 18, 2024 and sell it today you would earn a total of  152.00  from holding Global Business Travel or generate 20.38% return on investment over 90 days.

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

Global Business Travel  vs.  Maximus

Global Business Travel

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Business Travel are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Global Business reported solid returns over the last few months and may actually be approaching a breakup point.

Maximus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maximus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Global Business and Maximus

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

The idea behind Global Business Travel and Maximus 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.