Correlation Between Shanghai Shibei and BeiGene

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

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

Diversification Opportunities for Shanghai Shibei and BeiGene

0.0

Correlation Coefficient

Shanghai Shibei  BeiGene

Pay attention - limited upside

The 3 months correlation between Shanghai and BeiGene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shibei Hi Tech and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Shanghai Shibei 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 Shanghai Shibei Hi Tech are associated (or correlated) with BeiGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeiGene has no effect on the direction of Shanghai Shibei i.e., Shanghai Shibei and BeiGene go up and down completely randomly.

Pair Corralation between Shanghai Shibei and BeiGene

If you would invest  0.00  in BeiGene on December 28, 2024 and sell it today you would earn a total of  0.00  from holding BeiGene or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.75%
Values	Daily Returns

Shanghai Shibei Hi Tech  vs.  BeiGene

Shanghai Shibei Hi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shanghai Shibei Hi Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shanghai Shibei is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BeiGene

Risk-Adjusted Performance

Solid

Over the last 90 days BeiGene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BeiGene is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shanghai Shibei and BeiGene

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

The idea behind Shanghai Shibei Hi Tech and BeiGene 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.