Correlation Between Video River and Sino Biopharmaceutica

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

By analyzing existing cross correlation between Video River Networks and Sino Biopharmaceutical Ltd, you can compare the effects of market volatilities on Video River and Sino Biopharmaceutica 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 Video River with a short position of Sino Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Video River and Sino Biopharmaceutica.

Diversification Opportunities for Video River and Sino Biopharmaceutica

0.19

Correlation Coefficient

Video River  Sino Biopharmaceutica

Average diversification

The 3 months correlation between Video and Sino is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Video River Networks and Sino Biopharmaceutical Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Biopharmaceutical and Video River 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 Video River Networks are associated (or correlated) with Sino Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Biopharmaceutical has no effect on the direction of Video River i.e., Video River and Sino Biopharmaceutica go up and down completely randomly.

Pair Corralation between Video River and Sino Biopharmaceutica

Given the investment horizon of 90 days Video River Networks is expected to generate 10.51 times more return on investment than Sino Biopharmaceutica. However, Video River is 10.51 times more volatile than Sino Biopharmaceutical Ltd. It trades about 0.09 of its potential returns per unit of risk. Sino Biopharmaceutical Ltd is currently generating about 0.06 per unit of risk. If you would invest  0.28  in Video River Networks on December 27, 2024 and sell it today you would lose (0.12) from holding Video River Networks or give up 42.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Video River Networks  vs.  Sino Biopharmaceutical Ltd

Video River Networks

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Video River Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Video River disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sino Biopharmaceutical

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Video River and Sino Biopharmaceutica

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

The idea behind Video River Networks and Sino Biopharmaceutical Ltd 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..