Correlation Between Sino Biopharmaceutica and Cingulate

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

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

Diversification Opportunities for Sino Biopharmaceutica and Cingulate

-0.49

Correlation Coefficient

Sino Biopharmaceutica  Cingulate

Very good diversification

The 3 months correlation between Sino and Cingulate is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sino Biopharmaceutical Ltd and Cingulate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate and Sino Biopharmaceutica 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 Sino Biopharmaceutical Ltd are associated (or correlated) with Cingulate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate has no effect on the direction of Sino Biopharmaceutica i.e., Sino Biopharmaceutica and Cingulate go up and down completely randomly.

Pair Corralation between Sino Biopharmaceutica and Cingulate

Assuming the 90 days horizon Sino Biopharmaceutical Ltd is expected to generate 0.7 times more return on investment than Cingulate. However, Sino Biopharmaceutical Ltd is 1.43 times less risky than Cingulate. It trades about 0.06 of its potential returns per unit of risk. Cingulate is currently generating about -0.07 per unit of risk. If you would invest  834.00  in Sino Biopharmaceutical Ltd on December 23, 2024 and sell it today you would earn a total of  73.00  from holding Sino Biopharmaceutical Ltd or generate 8.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.85%
Values	Daily Returns

Sino Biopharmaceutical Ltd  vs.  Cingulate

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.

Cingulate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cingulate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Pair Trading with Sino Biopharmaceutica and Cingulate

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

The idea behind Sino Biopharmaceutical Ltd and Cingulate 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.