Correlation Between GP Investments and BeiGene
Can any of the company-specific risk be diversified away by investing in both GP Investments and BeiGene 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 GP Investments and BeiGene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and BeiGene, you can compare the effects of market volatilities on GP Investments and BeiGene 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 GP Investments with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and BeiGene.
Diversification Opportunities for GP Investments and BeiGene
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GPIV33 and BeiGene is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and GP Investments 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 GP Investments are associated (or correlated) with BeiGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeiGene has no effect on the direction of GP Investments i.e., GP Investments and BeiGene go up and down completely randomly.
Pair Corralation between GP Investments and BeiGene
Assuming the 90 days trading horizon GP Investments is expected to generate 1.43 times more return on investment than BeiGene. However, GP Investments is 1.43 times more volatile than BeiGene. It trades about 0.13 of its potential returns per unit of risk. BeiGene is currently generating about -0.15 per unit of risk. If you would invest 373.00 in GP Investments on August 28, 2024 and sell it today you would earn a total of 27.00 from holding GP Investments or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
GP Investments vs. BeiGene
Performance |
| Timeline |
| GP Investments |
| BeiGene |
GP Investments and BeiGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and BeiGene
The main advantage of trading using opposite GP Investments and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments position performs unexpectedly, BeiGene 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 BeiGene will offset losses from the drop in BeiGene's long position.| GP Investments vs. Fras le SA | GP Investments vs. Clave Indices De | GP Investments vs. BTG Pactual Logstica | GP Investments vs. Telefonaktiebolaget LM Ericsson |
| BeiGene vs. Brpr Corporate Offices | BeiGene vs. salesforce inc | BeiGene vs. GP Investments | BeiGene vs. Cognizant Technology Solutions |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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