Correlation Between Aptorum Group and Burning Rock

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

By analyzing existing cross correlation between Aptorum Group Ltd and Burning Rock Biotech, you can compare the effects of market volatilities on Aptorum Group and Burning Rock 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 Aptorum Group with a short position of Burning Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptorum Group and Burning Rock.

Diversification Opportunities for Aptorum Group and Burning Rock

-0.33

Correlation Coefficient

Aptorum Group  Burning Rock

Very good diversification

The 3 months correlation between Aptorum and Burning is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aptorum Group Ltd and Burning Rock Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burning Rock Biotech and Aptorum Group 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 Aptorum Group Ltd are associated (or correlated) with Burning Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burning Rock Biotech has no effect on the direction of Aptorum Group i.e., Aptorum Group and Burning Rock go up and down completely randomly.

Pair Corralation between Aptorum Group and Burning Rock

Considering the 90-day investment horizon Aptorum Group Ltd is expected to generate 7.48 times more return on investment than Burning Rock. However, Aptorum Group is 7.48 times more volatile than Burning Rock Biotech. It trades about 0.18 of its potential returns per unit of risk. Burning Rock Biotech is currently generating about 0.01 per unit of risk. If you would invest  74.00  in Aptorum Group Ltd on October 21, 2024 and sell it today you would earn a total of  41.00  from holding Aptorum Group Ltd or generate 55.41% return on investment over 90 days.

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

Aptorum Group Ltd  vs.  Burning Rock Biotech

Aptorum Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptorum Group Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptorum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Burning Rock Biotech

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Burning Rock Biotech are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Burning Rock reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptorum Group and Burning Rock

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

The idea behind Aptorum Group Ltd and Burning Rock Biotech 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.