Correlation Between Burning Rock and Longeveron LLC

Can any of the company-specific risk be diversified away by investing in both Burning Rock and Longeveron LLC 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 Longeveron LLC 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 Longeveron LLC, you can compare the effects of market volatilities on Burning Rock and Longeveron LLC 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 Longeveron LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Longeveron LLC.

Diversification Opportunities for Burning Rock and Longeveron LLC

-0.52

Correlation Coefficient

Burning Rock  Longeveron LLC

Excellent diversification

The 3 months correlation between Burning and Longeveron is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Longeveron LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longeveron LLC 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 Longeveron LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longeveron LLC has no effect on the direction of Burning Rock i.e., Burning Rock and Longeveron LLC go up and down completely randomly.

Pair Corralation between Burning Rock and Longeveron LLC

Considering the 90-day investment horizon Burning Rock Biotech is expected to generate 0.49 times more return on investment than Longeveron LLC. However, Burning Rock Biotech is 2.04 times less risky than Longeveron LLC. It trades about 0.01 of its potential returns per unit of risk. Longeveron LLC is currently generating about -0.02 per unit of risk. If you would invest  1,050  in Burning Rock Biotech on October 5, 2024 and sell it today you would lose (345.00) from holding Burning Rock Biotech or give up 32.86% of portfolio value over 90 days.

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

Burning Rock Biotech  vs.  Longeveron LLC

Burning Rock Biotech

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Burning Rock Biotech are ranked lower than 13 (%) 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.

Longeveron LLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Longeveron LLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Longeveron LLC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Burning Rock and Longeveron LLC

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

The idea behind Burning Rock Biotech and Longeveron LLC 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.