Correlation Between Burning Rock and Neogen

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Neogen 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 Neogen 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 Neogen, you can compare the effects of market volatilities on Burning Rock and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Neogen.

Diversification Opportunities for Burning Rock and Neogen

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Burning and Neogen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Burning Rock i.e., Burning Rock and Neogen go up and down completely randomly.

Pair Corralation between Burning Rock and Neogen

Considering the 90-day investment horizon Burning Rock Biotech is expected to generate 2.05 times more return on investment than Neogen. However, Burning Rock is 2.05 times more volatile than Neogen. It trades about -0.09 of its potential returns per unit of risk. Neogen is currently generating about -0.23 per unit of risk. If you would invest  695.00  in Burning Rock Biotech on December 28, 2024 and sell it today you would lose (225.00) from holding Burning Rock Biotech or give up 32.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Burning Rock Biotech  vs.  Neogen

 Performance 
       Timeline  
Burning Rock Biotech 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Burning Rock Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
Neogen 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Burning Rock and Neogen Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Burning Rock and Neogen

The main advantage of trading using opposite Burning Rock and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.
The idea behind Burning Rock Biotech and Neogen 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
CEOs Directory
Screen CEOs from public companies around the world
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins