Correlation Between BeiGene and Jiangsu Xinri

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

Diversification Opportunities for BeiGene and Jiangsu Xinri

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between BeiGene and Jiangsu is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BeiGene and Jiangsu Xinri E Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinri E and BeiGene 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 BeiGene are associated (or correlated) with Jiangsu Xinri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinri E has no effect on the direction of BeiGene i.e., BeiGene and Jiangsu Xinri go up and down completely randomly.

Pair Corralation between BeiGene and Jiangsu Xinri

Assuming the 90 days trading horizon BeiGene is expected to generate 1.52 times less return on investment than Jiangsu Xinri. In addition to that, BeiGene is 1.52 times more volatile than Jiangsu Xinri E Vehicle. It trades about 0.08 of its total potential returns per unit of risk. Jiangsu Xinri E Vehicle is currently generating about 0.18 per unit of volatility. If you would invest  1,048  in Jiangsu Xinri E Vehicle on September 5, 2024 and sell it today you would earn a total of  84.00  from holding Jiangsu Xinri E Vehicle or generate 8.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

BeiGene  vs.  Jiangsu Xinri E Vehicle

 Performance 
       Timeline  
BeiGene 

Risk-Adjusted Performance

8 of 100

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

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Xinri E Vehicle are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangsu Xinri sustained solid returns over the last few months and may actually be approaching a breakup point.

BeiGene and Jiangsu Xinri Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BeiGene and Jiangsu Xinri

The main advantage of trading using opposite BeiGene and Jiangsu Xinri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BeiGene position performs unexpectedly, Jiangsu Xinri 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 Jiangsu Xinri will offset losses from the drop in Jiangsu Xinri's long position.
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The idea behind BeiGene and Jiangsu Xinri E Vehicle 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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