Correlation Between Sino Biopharmaceutica and Tempest Therapeutics

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

Diversification Opportunities for Sino Biopharmaceutica and Tempest Therapeutics

-0.8

Correlation Coefficient

Sino Biopharmaceutica  Tempest Therapeutics

Pay attention - limited upside

The 3 months correlation between Sino and Tempest is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sino Biopharmaceutical Ltd and Tempest Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempest Therapeutics 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 Tempest Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempest Therapeutics has no effect on the direction of Sino Biopharmaceutica i.e., Sino Biopharmaceutica and Tempest Therapeutics go up and down completely randomly.

Pair Corralation between Sino Biopharmaceutica and Tempest Therapeutics

If you would invest  905.00  in Sino Biopharmaceutical Ltd on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Sino Biopharmaceutical Ltd or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Sino Biopharmaceutical Ltd  vs.  Tempest Therapeutics

Sino Biopharmaceutical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sino Biopharmaceutical Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Sino Biopharmaceutica showed solid returns over the last few months and may actually be approaching a breakup point.

Tempest Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tempest Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sino Biopharmaceutica and Tempest Therapeutics

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

The idea behind Sino Biopharmaceutical Ltd and Tempest Therapeutics 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.