Correlation Between Qi An and BeiGene

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Can any of the company-specific risk be diversified away by investing in both Qi An 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 Qi An and BeiGene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qi An Xin and BeiGene, you can compare the effects of market volatilities on Qi An 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 Qi An with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qi An and BeiGene.

Diversification Opportunities for Qi An and BeiGene

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between 688561 and BeiGene is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Qi An Xin and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Qi An 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 Qi An Xin 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 Qi An i.e., Qi An and BeiGene go up and down completely randomly.

Pair Corralation between Qi An and BeiGene

Assuming the 90 days trading horizon Qi An Xin is expected to under-perform the BeiGene. In addition to that, Qi An is 1.24 times more volatile than BeiGene. It trades about -0.03 of its total potential returns per unit of risk. BeiGene is currently generating about 0.02 per unit of volatility. If you would invest  15,245  in BeiGene on September 23, 2024 and sell it today you would earn a total of  877.00  from holding BeiGene or generate 5.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Qi An Xin  vs.  BeiGene

 Performance 
       Timeline  
Qi An Xin 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Qi An Xin are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qi An sustained solid returns over the last few months and may actually be approaching a breakup point.
BeiGene 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in BeiGene are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BeiGene sustained solid returns over the last few months and may actually be approaching a breakup point.

Qi An and BeiGene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Qi An and BeiGene

The main advantage of trading using opposite Qi An and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qi An 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 Qi An Xin 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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