Correlation Between Standard Biotools and Burning Rock
Can any of the company-specific risk be diversified away by investing in both Standard Biotools and Burning Rock 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 Standard Biotools and Burning Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Biotools and Burning Rock Biotech, you can compare the effects of market volatilities on Standard Biotools and Burning Rock 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 Standard Biotools with a short position of Burning Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Biotools and Burning Rock.
Diversification Opportunities for Standard Biotools and Burning Rock
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Standard and Burning is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Standard Biotools and Burning Rock Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burning Rock Biotech and Standard Biotools 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 Standard Biotools are associated (or correlated) with Burning Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burning Rock Biotech has no effect on the direction of Standard Biotools i.e., Standard Biotools and Burning Rock go up and down completely randomly.
Pair Corralation between Standard Biotools and Burning Rock
Considering the 90-day investment horizon Standard Biotools is expected to generate 7.44 times less return on investment than Burning Rock. But when comparing it to its historical volatility, Standard Biotools is 1.9 times less risky than Burning Rock. It trades about 0.08 of its potential returns per unit of risk. Burning Rock Biotech is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 285.00 in Burning Rock Biotech on August 29, 2024 and sell it today you would earn a total of 245.50 from holding Burning Rock Biotech or generate 86.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Biotools vs. Burning Rock Biotech
Performance |
| Timeline |
| Standard Biotools |
| Burning Rock Biotech |
Standard Biotools and Burning Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Biotools and Burning Rock
The main advantage of trading using opposite Standard Biotools and Burning Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Biotools position performs unexpectedly, Burning Rock 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 Burning Rock will offset losses from the drop in Burning Rock's long position.| Standard Biotools vs. Star Equity Holdings | Standard Biotools vs. Biodesix | Standard Biotools vs. ENDRA Life Sciences | Standard Biotools vs. Fonar |
| Burning Rock vs. Fonar | Burning Rock vs. Sera Prognostics | Burning Rock vs. Neuronetics | Burning Rock vs. DarioHealth Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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