Correlation Between Maximus and TTM Technologies

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

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

Diversification Opportunities for Maximus and TTM Technologies

0.37

Correlation Coefficient

Maximus  TTM Technologies

Weak diversification

The 3 months correlation between Maximus and TTM is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Maximus and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies and Maximus 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 Maximus are associated (or correlated) with TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Maximus i.e., Maximus and TTM Technologies go up and down completely randomly.

Pair Corralation between Maximus and TTM Technologies

Considering the 90-day investment horizon Maximus is expected to generate 99.39 times less return on investment than TTM Technologies. But when comparing it to its historical volatility, Maximus is 3.16 times less risky than TTM Technologies. It trades about 0.01 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,486  in TTM Technologies on February 2, 2024 and sell it today you would earn a total of  125.00  from holding TTM Technologies or generate 8.41% return on investment over 90 days.

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

Maximus  vs.  TTM Technologies

Maximus

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Maximus are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Maximus is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

TTM Technologies

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TTM Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain primary indicators, TTM Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maximus and TTM Technologies

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

The idea behind Maximus and TTM Technologies 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.