Correlation Between Burning Rock and Check Cap
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Check Cap 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 Check Cap 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 Check Cap, you can compare the effects of market volatilities on Burning Rock and Check Cap 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 Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Check Cap.
Diversification Opportunities for Burning Rock and Check Cap
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Burning and Check is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap 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 Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Burning Rock i.e., Burning Rock and Check Cap go up and down completely randomly.
Pair Corralation between Burning Rock and Check Cap
Considering the 90-day investment horizon Burning Rock Biotech is expected to generate 1.44 times more return on investment than Check Cap. However, Burning Rock is 1.44 times more volatile than Check Cap. It trades about 0.47 of its potential returns per unit of risk. Check Cap is currently generating about -0.33 per unit of risk. If you would invest 285.00 in Burning Rock Biotech on August 28, 2024 and sell it today you would earn a total of 271.00 from holding Burning Rock Biotech or generate 95.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Burning Rock Biotech vs. Check Cap
Performance |
| Timeline |
| Burning Rock Biotech |
| Check Cap |
Burning Rock and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burning Rock and Check Cap
The main advantage of trading using opposite Burning Rock and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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