Correlation Between Adagene and Sino Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Adagene and Sino Biopharmaceutica 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 Adagene and Sino Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adagene and Sino Biopharmaceutical Limited, you can compare the effects of market volatilities on Adagene and Sino Biopharmaceutica 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 Adagene with a short position of Sino Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adagene and Sino Biopharmaceutica.
Diversification Opportunities for Adagene and Sino Biopharmaceutica
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adagene and Sino is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Adagene and Sino Biopharmaceutical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Biopharmaceutical and Adagene 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 Adagene are associated (or correlated) with Sino Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Biopharmaceutical has no effect on the direction of Adagene i.e., Adagene and Sino Biopharmaceutica go up and down completely randomly.
Pair Corralation between Adagene and Sino Biopharmaceutica
Given the investment horizon of 90 days Adagene is expected to generate 1.12 times more return on investment than Sino Biopharmaceutica. However, Adagene is 1.12 times more volatile than Sino Biopharmaceutical Limited. It trades about 0.05 of its potential returns per unit of risk. Sino Biopharmaceutical Limited is currently generating about 0.01 per unit of risk. If you would invest 138.00 in Adagene on September 4, 2024 and sell it today you would earn a total of 81.00 from holding Adagene or generate 58.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.02% |
| Values | Daily Returns |
Adagene vs. Sino Biopharmaceutical Limited
Performance |
| Timeline |
| Adagene |
| Sino Biopharmaceutical |
Adagene and Sino Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adagene and Sino Biopharmaceutica
The main advantage of trading using opposite Adagene and Sino Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adagene position performs unexpectedly, Sino Biopharmaceutica 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 Sino Biopharmaceutica will offset losses from the drop in Sino Biopharmaceutica's long position.| Adagene vs. Candel Therapeutics | Adagene vs. Cingulate Warrants | Adagene vs. Unicycive Therapeutics | Adagene vs. Cardio Diagnostics Holdings |
| Sino Biopharmaceutica vs. Therapeutic Solutions International | Sino Biopharmaceutica vs. Vg Life Sciences | Sino Biopharmaceutica vs. Adagene | Sino Biopharmaceutica vs. Marizyme |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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