Correlation Between Burning Rock and Star Equity
Can any of the company-specific risk be diversified away by investing in both Burning Rock and Star Equity 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 Star Equity 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 Star Equity Holdings, you can compare the effects of market volatilities on Burning Rock and Star Equity 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 Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burning Rock and Star Equity.
Diversification Opportunities for Burning Rock and Star Equity
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Burning and Star is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Burning Rock Biotech and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings 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 Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of Burning Rock i.e., Burning Rock and Star Equity go up and down completely randomly.
Pair Corralation between Burning Rock and Star Equity
Considering the 90-day investment horizon Burning Rock Biotech is expected to generate 8.22 times more return on investment than Star Equity. However, Burning Rock is 8.22 times more volatile than Star Equity Holdings. It trades about 0.49 of its potential returns per unit of risk. Star Equity Holdings is currently generating about 0.04 per unit of risk. If you would invest 282.00 in Burning Rock Biotech on August 26, 2024 and sell it today you would earn a total of 278.00 from holding Burning Rock Biotech or generate 98.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burning Rock Biotech vs. Star Equity Holdings
Performance |
| Timeline |
| Burning Rock Biotech |
| Star Equity Holdings |
Burning Rock and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burning Rock and Star Equity
The main advantage of trading using opposite Burning Rock and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burning Rock position performs unexpectedly, Star Equity 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 Star Equity will offset losses from the drop in Star Equity's long position.| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
| Star Equity vs. Star Equity Holdings | Star Equity vs. XOMA Corp | Star Equity vs. Fundamental Global | Star Equity vs. Fortress Biotech Pref |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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