Correlation Between Shenzhen SDG and BeiGene

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Can any of the company-specific risk be diversified away by investing in both Shenzhen SDG and BeiGene 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 Shenzhen SDG and BeiGene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenzhen SDG Information and BeiGene, you can compare the effects of market volatilities on Shenzhen SDG and BeiGene 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 Shenzhen SDG with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen SDG and BeiGene.

Diversification Opportunities for Shenzhen SDG and BeiGene

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Shenzhen and BeiGene is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen SDG Information and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Shenzhen SDG 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 Shenzhen SDG Information are associated (or correlated) with BeiGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeiGene has no effect on the direction of Shenzhen SDG i.e., Shenzhen SDG and BeiGene go up and down completely randomly.

Pair Corralation between Shenzhen SDG and BeiGene

Assuming the 90 days trading horizon Shenzhen SDG Information is expected to under-perform the BeiGene. In addition to that, Shenzhen SDG is 1.32 times more volatile than BeiGene. It trades about 0.0 of its total potential returns per unit of risk. BeiGene is currently generating about 0.02 per unit of volatility. If you would invest  15,400  in BeiGene on October 15, 2024 and sell it today you would earn a total of  665.00  from holding BeiGene or generate 4.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shenzhen SDG Information  vs.  BeiGene

 Performance 
       Timeline  
Shenzhen SDG Information 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen SDG Information are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen SDG sustained solid returns over the last few months and may actually be approaching a breakup point.
BeiGene 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BeiGene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Shenzhen SDG and BeiGene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shenzhen SDG and BeiGene

The main advantage of trading using opposite Shenzhen SDG and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen SDG position performs unexpectedly, BeiGene 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 BeiGene will offset losses from the drop in BeiGene's long position.
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The idea behind Shenzhen SDG Information and BeiGene 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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Check out your portfolio center.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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