Correlation Between BeiGene and Beijing Venustech

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

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

Diversification Opportunities for BeiGene and Beijing Venustech

0.0

Correlation Coefficient

BeiGene  Beijing Venustech

Pay attention - limited upside

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

Pair Corralation between BeiGene and Beijing Venustech

If you would invest  15,435  in BeiGene on September 18, 2024 and sell it today you would earn a total of  1,044  from holding BeiGene or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

BeiGene  vs.  Beijing Venustech

BeiGene

Risk-Adjusted Performance

3 of 100

Insignificant

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

Beijing Venustech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BeiGene and Beijing Venustech

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

The idea behind BeiGene and Beijing Venustech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.