Correlation Between BeiGene and MayAir Technology

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

By analyzing existing cross correlation between BeiGene and MayAir Technology Co, you can compare the effects of market volatilities on BeiGene and MayAir Technology 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 MayAir Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BeiGene and MayAir Technology.

Diversification Opportunities for BeiGene and MayAir Technology

0.69

Correlation Coefficient

BeiGene  MayAir Technology

Poor diversification

The 3 months correlation between BeiGene and MayAir is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BeiGene and MayAir Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MayAir Technology 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 MayAir Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MayAir Technology has no effect on the direction of BeiGene i.e., BeiGene and MayAir Technology go up and down completely randomly.

Pair Corralation between BeiGene and MayAir Technology

Assuming the 90 days trading horizon BeiGene is expected to generate 0.64 times more return on investment than MayAir Technology. However, BeiGene is 1.55 times less risky than MayAir Technology. It trades about -0.23 of its potential returns per unit of risk. MayAir Technology Co is currently generating about -0.44 per unit of risk. If you would invest  16,891  in BeiGene on October 8, 2024 and sell it today you would lose (936.00) from holding BeiGene or give up 5.54% of portfolio value over 90 days.

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

BeiGene  vs.  MayAir Technology Co

BeiGene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BeiGene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MayAir Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MayAir Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BeiGene and MayAir Technology

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

The idea behind BeiGene and MayAir Technology Co 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.