Correlation Between I Mab and BeiGene
Can any of the company-specific risk be diversified away by investing in both I Mab 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 I Mab and BeiGene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Mab and BeiGene, you can compare the effects of market volatilities on I Mab 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 I Mab with a short position of BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Mab and BeiGene.
Diversification Opportunities for I Mab and BeiGene
Poor diversification
The 3 months correlation between IMAB and BeiGene is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding I Mab and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene and I Mab 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 I Mab 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 I Mab i.e., I Mab and BeiGene go up and down completely randomly.
Pair Corralation between I Mab and BeiGene
Given the investment horizon of 90 days I Mab is expected to under-perform the BeiGene. In addition to that, I Mab is 2.18 times more volatile than BeiGene. It trades about -0.04 of its total potential returns per unit of risk. BeiGene is currently generating about -0.01 per unit of volatility. If you would invest 19,816 in BeiGene on August 28, 2024 and sell it today you would lose (786.00) from holding BeiGene or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
I Mab vs. BeiGene
Performance |
| Timeline |
| I Mab |
| BeiGene |
I Mab and BeiGene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Mab and BeiGene
The main advantage of trading using opposite I Mab and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Mab 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.The idea behind I Mab and BeiGene pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BeiGene vs. Eliem Therapeutics | BeiGene vs. Scpharmaceuticals | BeiGene vs. Milestone Pharmaceuticals | BeiGene vs. Seres Therapeutics |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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