Correlation Between Chongqing Sulian and BeiGene

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

Diversification Opportunities for Chongqing Sulian and BeiGene

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Chongqing and BeiGene is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Sulian Plastic and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and Chongqing Sulian 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 Chongqing Sulian Plastic 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 Chongqing Sulian i.e., Chongqing Sulian and BeiGene go up and down completely randomly.

Pair Corralation between Chongqing Sulian and BeiGene

Assuming the 90 days trading horizon Chongqing Sulian Plastic is expected to under-perform the BeiGene. In addition to that, Chongqing Sulian is 1.27 times more volatile than BeiGene. It trades about -0.01 of its total potential returns per unit of risk. BeiGene is currently generating about 0.01 per unit of volatility. If you would invest  15,725  in BeiGene on October 7, 2024 and sell it today you would earn a total of  230.00  from holding BeiGene or generate 1.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy77.82%
ValuesDaily Returns

Chongqing Sulian Plastic  vs.  BeiGene

 Performance 
       Timeline  
Chongqing Sulian Plastic 

Risk-Adjusted Performance

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Over the last 90 days Chongqing Sulian Plastic 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 somewhat 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.
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 weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Chongqing Sulian and BeiGene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chongqing Sulian and BeiGene

The main advantage of trading using opposite Chongqing Sulian and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Sulian 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 Chongqing Sulian Plastic 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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