Correlation Between Burning Rock and IBio, Common

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

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

Diversification Opportunities for Burning Rock and IBio, Common

-0.77

Correlation Coefficient

Burning Rock  IBio, Common

Pay attention - limited upside

The 3 months correlation between Burning and IBio, is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and iBio, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iBio, Common Stock and Burning Rock 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 Burning Rock Biotech are associated (or correlated) with IBio, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iBio, Common Stock has no effect on the direction of Burning Rock i.e., Burning Rock and IBio, Common go up and down completely randomly.

Pair Corralation between Burning Rock and IBio, Common

Considering the 90-day investment horizon Burning Rock Biotech is expected to under-perform the IBio, Common. But the stock apears to be less risky and, when comparing its historical volatility, Burning Rock Biotech is 1.34 times less risky than IBio, Common. The stock trades about -0.02 of its potential returns per unit of risk. The iBio, Common Stock is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  248.00  in iBio, Common Stock on December 20, 2024 and sell it today you would earn a total of  208.00  from holding iBio, Common Stock or generate 83.87% return on investment over 90 days.

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

Burning Rock Biotech  vs.  iBio, Common Stock

Burning Rock Biotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Burning Rock Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Burning Rock is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

iBio, Common Stock

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iBio, Common Stock are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, IBio, Common displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Burning Rock and IBio, Common

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

The idea behind Burning Rock Biotech and iBio, Common Stock 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.