Correlation Between Longxing Chemical and BeiGene
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By analyzing existing cross correlation between Longxing Chemical Stock and BeiGene, you can compare the effects of market volatilities on Longxing Chemical 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 Longxing Chemical with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longxing Chemical and BeiGene.
Diversification Opportunities for Longxing Chemical and BeiGene
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Longxing and BeiGene is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Longxing Chemical Stock and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Longxing Chemical 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 Longxing Chemical Stock 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 Longxing Chemical i.e., Longxing Chemical and BeiGene go up and down completely randomly.
Pair Corralation between Longxing Chemical and BeiGene
Assuming the 90 days trading horizon Longxing Chemical is expected to generate 2.49 times less return on investment than BeiGene. In addition to that, Longxing Chemical is 1.72 times more volatile than BeiGene. It trades about 0.08 of its total potential returns per unit of risk. BeiGene is currently generating about 0.33 per unit of volatility. If you would invest 16,100 in BeiGene on October 24, 2024 and sell it today you would earn a total of 2,878 from holding BeiGene or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longxing Chemical Stock vs. BeiGene
Performance |
| Timeline |
| Longxing Chemical Stock |
| BeiGene |
Longxing Chemical and BeiGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longxing Chemical and BeiGene
The main advantage of trading using opposite Longxing Chemical and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longxing Chemical 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.| Longxing Chemical vs. Ningbo Jintian Copper | Longxing Chemical vs. Xinjiang Beixin RoadBridge | Longxing Chemical vs. China Minmetals Rare | Longxing Chemical vs. Ningxia Younglight Chemicals |
| BeiGene vs. Fibocom Wireless | BeiGene vs. Beijing Kingsoft Office | BeiGene vs. Southern PublishingMedia Co | BeiGene vs. Guangzhou Jinyi Media |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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