Correlation Between I Mab and BeiGene

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

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

Diversification Opportunities for I Mab and BeiGene

0.81

Correlation Coefficient

I Mab  BeiGene

Very poor diversification

The 3 months correlation between IMAB and BeiGene is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding I Mab and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and I Mab 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 I Mab are associated (or correlated) with BeiGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeiGene has no effect on the direction of I Mab i.e., I Mab and BeiGene go up and down completely randomly.

Pair Corralation between I Mab and BeiGene

Given the investment horizon of 90 days I Mab is expected to generate 1.14 times more return on investment than BeiGene. However, I Mab is 1.14 times more volatile than BeiGene. It trades about -0.03 of its potential returns per unit of risk. BeiGene is currently generating about -0.06 per unit of risk. If you would invest  95.00  in I Mab on September 27, 2024 and sell it today you would lose (4.00) from holding I Mab or give up 4.21% of portfolio value over 90 days.

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

I Mab  vs.  BeiGene

I Mab

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I Mab has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BeiGene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BeiGene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with I Mab and BeiGene

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

The idea behind I Mab and BeiGene 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.