Correlation Between China Asset and BeiGene
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By analyzing existing cross correlation between China Asset Management and BeiGene, you can compare the effects of market volatilities on China Asset 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 China Asset with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and BeiGene.
Diversification Opportunities for China Asset and BeiGene
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and BeiGene is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and China Asset 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 China Asset Management 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 China Asset i.e., China Asset and BeiGene go up and down completely randomly.
Pair Corralation between China Asset and BeiGene
Assuming the 90 days trading horizon China Asset is expected to generate 2.75 times less return on investment than BeiGene. But when comparing it to its historical volatility, China Asset Management is 1.1 times less risky than BeiGene. It trades about 0.11 of its potential returns per unit of risk. BeiGene is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 18,218 in BeiGene on November 18, 2024 and sell it today you would earn a total of 1,556 from holding BeiGene or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Asset Management vs. BeiGene
Performance |
| Timeline |
| China Asset Management |
| BeiGene |
China Asset and BeiGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Asset and BeiGene
The main advantage of trading using opposite China Asset and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset 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.| China Asset vs. AVIC Fund Management | China Asset vs. Hunan TV Broadcast | China Asset vs. Shenzhen Prolto Supply | China Asset vs. Guizhou BroadcastingTV Info |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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