Correlation Between Belite Bio and Shenzhen Investment
Can any of the company-specific risk be diversified away by investing in both Belite Bio and Shenzhen Investment 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 Belite Bio and Shenzhen Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belite Bio ADR and Shenzhen Investment Bay, you can compare the effects of market volatilities on Belite Bio and Shenzhen Investment 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 Belite Bio with a short position of Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belite Bio and Shenzhen Investment.
Diversification Opportunities for Belite Bio and Shenzhen Investment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Belite and Shenzhen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Belite Bio ADR and Shenzhen Investment Bay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment Bay and Belite Bio 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 Belite Bio ADR are associated (or correlated) with Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment Bay has no effect on the direction of Belite Bio i.e., Belite Bio and Shenzhen Investment go up and down completely randomly.
Pair Corralation between Belite Bio and Shenzhen Investment
Given the investment horizon of 90 days Belite Bio ADR is expected to generate 79.57 times more return on investment than Shenzhen Investment. However, Belite Bio is 79.57 times more volatile than Shenzhen Investment Bay. It trades about 0.01 of its potential returns per unit of risk. Shenzhen Investment Bay is currently generating about -0.21 per unit of risk. If you would invest 6,978 in Belite Bio ADR on August 30, 2024 and sell it today you would lose (234.00) from holding Belite Bio ADR or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belite Bio ADR vs. Shenzhen Investment Bay
Performance |
| Timeline |
| Belite Bio ADR |
| Shenzhen Investment Bay |
Belite Bio and Shenzhen Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belite Bio and Shenzhen Investment
The main advantage of trading using opposite Belite Bio and Shenzhen Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belite Bio position performs unexpectedly, Shenzhen Investment 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 Shenzhen Investment will offset losses from the drop in Shenzhen Investment's long position.| Belite Bio vs. Anebulo Pharmaceuticals | Belite Bio vs. Mineralys Therapeutics, Common | Belite Bio vs. AN2 Therapeutics | Belite Bio vs. Aerovate Therapeutics |
| Shenzhen Investment vs. Jiangsu Expressway Co | Shenzhen Investment vs. Jiangsu Expressway | Shenzhen Investment vs. Zhejiang Expressway Co | Shenzhen Investment vs. Yuexiu Transport Infrastructure |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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