Correlation Between Burning Rock and Inotiv
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Inotiv 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 Inotiv 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 Inotiv Inc, you can compare the effects of market volatilities on Burning Rock and Inotiv 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 Inotiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Inotiv.
Diversification Opportunities for Burning Rock and Inotiv
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burning and Inotiv is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Inotiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inotiv Inc 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 Inotiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inotiv Inc has no effect on the direction of Burning Rock i.e., Burning Rock and Inotiv go up and down completely randomly.
Pair Corralation between Burning Rock and Inotiv
Considering the 90-day investment horizon Burning Rock Biotech is expected to under-perform the Inotiv. But the stock apears to be less risky and, when comparing its historical volatility, Burning Rock Biotech is 1.41 times less risky than Inotiv. The stock trades about -0.03 of its potential returns per unit of risk. The Inotiv Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Inotiv Inc on August 24, 2024 and sell it today you would lose (223.00) from holding Inotiv Inc or give up 39.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Burning Rock Biotech vs. Inotiv Inc
Performance |
| Timeline |
| Burning Rock Biotech |
| Inotiv Inc |
Burning Rock and Inotiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burning Rock and Inotiv
The main advantage of trading using opposite Burning Rock and Inotiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Inotiv 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 Inotiv will offset losses from the drop in Inotiv's long position.| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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