Correlation Between Intelligent Bio and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Intelligent Bio and WuXi AppTec 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 Intelligent Bio and WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intelligent Bio Solutions and WuXi AppTec Co, you can compare the effects of market volatilities on Intelligent Bio and WuXi AppTec 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 Intelligent Bio with a short position of WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelligent Bio and WuXi AppTec.
Diversification Opportunities for Intelligent Bio and WuXi AppTec
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intelligent and WuXi is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Bio Solutions and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec and Intelligent Bio 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 Intelligent Bio Solutions are associated (or correlated) with WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Intelligent Bio i.e., Intelligent Bio and WuXi AppTec go up and down completely randomly.
Pair Corralation between Intelligent Bio and WuXi AppTec
Given the investment horizon of 90 days Intelligent Bio Solutions is expected to generate 4.4 times more return on investment than WuXi AppTec. However, Intelligent Bio is 4.4 times more volatile than WuXi AppTec Co. It trades about 0.01 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.0 per unit of risk. If you would invest 9,552 in Intelligent Bio Solutions on September 3, 2024 and sell it today you would lose (9,392) from holding Intelligent Bio Solutions or give up 98.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intelligent Bio Solutions vs. WuXi AppTec Co
Performance |
| Timeline |
| Intelligent Bio Solutions |
| WuXi AppTec |
Intelligent Bio and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intelligent Bio and WuXi AppTec
The main advantage of trading using opposite Intelligent Bio and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Bio position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| Intelligent Bio vs. Harmony Gold Mining | Intelligent Bio vs. Sapiens International | Intelligent Bio vs. SmartStop Self Storage | Intelligent Bio vs. Asure Software |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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