Correlation Between Burning Rock and Biodesix
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Biodesix 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 Burning Rock and Biodesix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burning Rock Biotech and Biodesix, you can compare the effects of market volatilities on Burning Rock and Biodesix 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 Burning Rock with a short position of Biodesix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Biodesix.
Diversification Opportunities for Burning Rock and Biodesix
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Burning and Biodesix is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Biodesix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodesix and Burning Rock 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 Burning Rock Biotech are associated (or correlated) with Biodesix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodesix has no effect on the direction of Burning Rock i.e., Burning Rock and Biodesix go up and down completely randomly.
Pair Corralation between Burning Rock and Biodesix
Considering the 90-day investment horizon Burning Rock Biotech is expected to under-perform the Biodesix. In addition to that, Burning Rock is 1.05 times more volatile than Biodesix. It trades about -0.03 of its total potential returns per unit of risk. Biodesix is currently generating about 0.02 per unit of volatility. If you would invest 134.00 in Biodesix on August 27, 2024 and sell it today you would lose (6.00) from holding Biodesix or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burning Rock Biotech vs. Biodesix
Performance |
| Timeline |
| Burning Rock Biotech |
| Biodesix |
Burning Rock and Biodesix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burning Rock and Biodesix
The main advantage of trading using opposite Burning Rock and Biodesix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Biodesix 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 Biodesix will offset losses from the drop in Biodesix's long position.| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
| Biodesix vs. Aclaris Therapeutics | Biodesix vs. Castle Biosciences | Biodesix vs. Prenetics Global | Biodesix vs. DarioHealth Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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