Correlation Between China Building and BeiGene
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By analyzing existing cross correlation between China Building Material and BeiGene, you can compare the effects of market volatilities on China Building 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 Building with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and BeiGene.
Diversification Opportunities for China Building and BeiGene
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and BeiGene is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and China Building 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 Building Material 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 Building i.e., China Building and BeiGene go up and down completely randomly.
Pair Corralation between China Building and BeiGene
Assuming the 90 days trading horizon China Building Material is expected to under-perform the BeiGene. But the stock apears to be less risky and, when comparing its historical volatility, China Building Material is 1.35 times less risky than BeiGene. The stock trades about -0.21 of its potential returns per unit of risk. The BeiGene is currently generating about 0.33 of returns per unit of risk over similar time horizon. 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 |
China Building Material vs. BeiGene
Performance |
| Timeline |
| China Building Material |
| BeiGene |
China Building and BeiGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and BeiGene
The main advantage of trading using opposite China Building and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building 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 Building vs. Southern PublishingMedia Co | China Building vs. Jiangxi Naipu Mining | China Building vs. Chinese Universe Publishing | China Building vs. Guangdong Silvere Sci |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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