Correlation Between Hookipa Pharma and Burning Rock

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

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

Diversification Opportunities for Hookipa Pharma and Burning Rock

-0.9

Correlation Coefficient

Hookipa Pharma  Burning Rock

Pay attention - limited upside

The 3 months correlation between Hookipa and Burning is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hookipa Pharma 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 Hookipa Pharma 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 Hookipa Pharma 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 Hookipa Pharma i.e., Hookipa Pharma and Burning Rock go up and down completely randomly.

Pair Corralation between Hookipa Pharma and Burning Rock

Given the investment horizon of 90 days Hookipa Pharma is expected to under-perform the Burning Rock. In addition to that, Hookipa Pharma is 1.09 times more volatile than Burning Rock Biotech. It trades about -0.03 of its total potential returns per unit of risk. Burning Rock Biotech is currently generating about -0.03 per unit of volatility. If you would invest  2,560  in Burning Rock Biotech on September 26, 2024 and sell it today you would lose (1,910) from holding Burning Rock Biotech or give up 74.61% of portfolio value over 90 days.

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

Hookipa Pharma  vs.  Burning Rock Biotech

Hookipa Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hookipa Pharma 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 quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 unsteady basic indicators, Burning Rock reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hookipa Pharma and Burning Rock

The main advantage of trading using opposite Hookipa Pharma and Burning Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hookipa Pharma 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 Hookipa Pharma 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.