Correlation Between Burning Rock and Mesa Laboratories
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Mesa Laboratories 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 Mesa Laboratories 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 Mesa Laboratories, you can compare the effects of market volatilities on Burning Rock and Mesa Laboratories 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 Mesa Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Mesa Laboratories.
Diversification Opportunities for Burning Rock and Mesa Laboratories
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burning and Mesa is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Mesa Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Laboratories 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 Mesa Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Laboratories has no effect on the direction of Burning Rock i.e., Burning Rock and Mesa Laboratories go up and down completely randomly.
Pair Corralation between Burning Rock and Mesa Laboratories
Considering the 90-day investment horizon Burning Rock Biotech is expected to under-perform the Mesa Laboratories. In addition to that, Burning Rock is 1.66 times more volatile than Mesa Laboratories. It trades about -0.04 of its total potential returns per unit of risk. Mesa Laboratories is currently generating about 0.01 per unit of volatility. If you would invest 13,226 in Mesa Laboratories on August 31, 2024 and sell it today you would lose (1,512) from holding Mesa Laboratories or give up 11.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burning Rock Biotech vs. Mesa Laboratories
Performance |
| Timeline |
| Burning Rock Biotech |
| Mesa Laboratories |
Burning Rock and Mesa Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burning Rock and Mesa Laboratories
The main advantage of trading using opposite Burning Rock and Mesa Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Mesa Laboratories 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 Mesa Laboratories will offset losses from the drop in Mesa Laboratories' long position.| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
| Mesa Laboratories vs. Novanta | Mesa Laboratories vs. Itron Inc | Mesa Laboratories vs. Fortive Corp | Mesa Laboratories vs. Vishay Precision Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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