Correlation Between Sino Biopharmaceutica and Cellectis

Can any of the company-specific risk be diversified away by investing in both Sino Biopharmaceutica and Cellectis 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 Cellectis 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 Cellectis SA, you can compare the effects of market volatilities on Sino Biopharmaceutica and Cellectis 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 Cellectis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Biopharmaceutica and Cellectis.

Diversification Opportunities for Sino Biopharmaceutica and Cellectis

0.75

Correlation Coefficient

Sino Biopharmaceutica  Cellectis

Poor diversification

The 3 months correlation between Sino and Cellectis is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sino Biopharmaceutical Ltd and Cellectis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellectis SA 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 Cellectis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellectis SA has no effect on the direction of Sino Biopharmaceutica i.e., Sino Biopharmaceutica and Cellectis go up and down completely randomly.

Pair Corralation between Sino Biopharmaceutica and Cellectis

Assuming the 90 days horizon Sino Biopharmaceutical Ltd is expected to generate 0.31 times more return on investment than Cellectis. However, Sino Biopharmaceutical Ltd is 3.2 times less risky than Cellectis. It trades about -0.23 of its potential returns per unit of risk. Cellectis SA is currently generating about -0.17 per unit of risk. If you would invest  965.00  in Sino Biopharmaceutical Ltd on October 21, 2024 and sell it today you would lose (227.00) from holding Sino Biopharmaceutical Ltd or give up 23.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.38%
Values	Daily Returns

Sino Biopharmaceutical Ltd  vs.  Cellectis SA

Sino Biopharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sino Biopharmaceutical Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cellectis SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellectis SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sino Biopharmaceutica and Cellectis

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

The idea behind Sino Biopharmaceutical Ltd and Cellectis SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.