Correlation Between Mineralys Therapeutics, and Belite Bio

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

By analyzing existing cross correlation between Mineralys Therapeutics, Common and Belite Bio ADR, you can compare the effects of market volatilities on Mineralys Therapeutics, and Belite Bio 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 Mineralys Therapeutics, with a short position of Belite Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineralys Therapeutics, and Belite Bio.

Diversification Opportunities for Mineralys Therapeutics, and Belite Bio

0.86

Correlation Coefficient

Mineralys Therapeutics,  Belite Bio

Very poor diversification

The 3 months correlation between Mineralys and Belite is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mineralys Therapeutics, Common and Belite Bio ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belite Bio ADR and Mineralys Therapeutics, 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 Mineralys Therapeutics, Common are associated (or correlated) with Belite Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belite Bio ADR has no effect on the direction of Mineralys Therapeutics, i.e., Mineralys Therapeutics, and Belite Bio go up and down completely randomly.

Pair Corralation between Mineralys Therapeutics, and Belite Bio

Given the investment horizon of 90 days Mineralys Therapeutics, Common is expected to generate 2.69 times more return on investment than Belite Bio. However, Mineralys Therapeutics, is 2.69 times more volatile than Belite Bio ADR. It trades about 0.07 of its potential returns per unit of risk. Belite Bio ADR is currently generating about 0.06 per unit of risk. If you would invest  1,252  in Mineralys Therapeutics, Common on December 29, 2024 and sell it today you would earn a total of  214.00  from holding Mineralys Therapeutics, Common or generate 17.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Mineralys Therapeutics, Common  vs.  Belite Bio ADR

Mineralys Therapeutics,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mineralys Therapeutics, Common are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Mineralys Therapeutics, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Belite Bio ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Belite Bio ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Belite Bio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mineralys Therapeutics, and Belite Bio

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

The idea behind Mineralys Therapeutics, Common and Belite Bio ADR 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.