Correlation Between Niutech Environment and BeiGene

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

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

Diversification Opportunities for Niutech Environment and BeiGene

0.29

Correlation Coefficient

Niutech Environment  BeiGene

Modest diversification

The 3 months correlation between Niutech and BeiGene is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Niutech Environment Technology and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Niutech Environment 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 Niutech Environment Technology 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 Niutech Environment i.e., Niutech Environment and BeiGene go up and down completely randomly.

Pair Corralation between Niutech Environment and BeiGene

Assuming the 90 days trading horizon Niutech Environment Technology is expected to under-perform the BeiGene. In addition to that, Niutech Environment is 1.03 times more volatile than BeiGene. It trades about -0.07 of its total potential returns per unit of risk. BeiGene is currently generating about 0.04 per unit of volatility. If you would invest  18,038  in BeiGene on October 23, 2024 and sell it today you would earn a total of  742.00  from holding BeiGene or generate 4.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Niutech Environment Technology  vs.  BeiGene

Niutech Environment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Niutech Environment Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

BeiGene

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BeiGene are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Niutech Environment and BeiGene

The main advantage of trading using opposite Niutech Environment and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niutech Environment 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 Niutech Environment Technology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.