Correlation Between IGG and Sino Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both IGG and Sino Biopharmaceutica 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 IGG and Sino Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGG Inc and Sino Biopharmaceutical Limited, you can compare the effects of market volatilities on IGG and Sino Biopharmaceutica 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 IGG with a short position of Sino Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGG and Sino Biopharmaceutica.
Diversification Opportunities for IGG and Sino Biopharmaceutica
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IGG and Sino is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding IGG Inc and Sino Biopharmaceutical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Biopharmaceutical and IGG 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 IGG Inc are associated (or correlated) with Sino Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Biopharmaceutical has no effect on the direction of IGG i.e., IGG and Sino Biopharmaceutica go up and down completely randomly.
Pair Corralation between IGG and Sino Biopharmaceutica
Assuming the 90 days horizon IGG Inc is expected to generate 2.41 times more return on investment than Sino Biopharmaceutica. However, IGG is 2.41 times more volatile than Sino Biopharmaceutical Limited. It trades about 0.05 of its potential returns per unit of risk. Sino Biopharmaceutical Limited is currently generating about 0.07 per unit of risk. If you would invest 42.00 in IGG Inc on September 1, 2024 and sell it today you would earn a total of 6.00 from holding IGG Inc or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 70.81% |
| Values | Daily Returns |
IGG Inc vs. Sino Biopharmaceutical Limited
Performance |
| Timeline |
| IGG Inc |
| Sino Biopharmaceutical |
IGG and Sino Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGG and Sino Biopharmaceutica
The main advantage of trading using opposite IGG and Sino Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGG position performs unexpectedly, Sino Biopharmaceutica 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 Sino Biopharmaceutica will offset losses from the drop in Sino Biopharmaceutica's long position.| IGG vs. CD Projekt SA | IGG vs. Sega Sammy Holdings | IGG vs. Playtika Holding Corp | IGG vs. Square Enix Holdings |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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