Correlation Between Inotiv and Burning Rock
Can any of the company-specific risk be diversified away by investing in both Inotiv 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 Inotiv and Burning Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inotiv Inc and Burning Rock Biotech, you can compare the effects of market volatilities on Inotiv 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 Inotiv with a short position of Burning Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inotiv and Burning Rock.
Diversification Opportunities for Inotiv and Burning Rock
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inotiv and Burning is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Inotiv Inc 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 Inotiv 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 Inotiv Inc 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 Inotiv i.e., Inotiv and Burning Rock go up and down completely randomly.
Pair Corralation between Inotiv and Burning Rock
Given the investment horizon of 90 days Inotiv Inc is expected to generate 1.34 times more return on investment than Burning Rock. However, Inotiv is 1.34 times more volatile than Burning Rock Biotech. It trades about 0.05 of its potential returns per unit of risk. Burning Rock Biotech is currently generating about 0.01 per unit of risk. If you would invest 368.00 in Inotiv Inc on November 3, 2024 and sell it today you would earn a total of 60.00 from holding Inotiv Inc or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Inotiv Inc vs. Burning Rock Biotech
Performance |
| Timeline |
| Inotiv Inc |
| Burning Rock Biotech |
Inotiv and Burning Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inotiv and Burning Rock
The main advantage of trading using opposite Inotiv and Burning Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inotiv 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.The idea behind Inotiv Inc and Burning Rock Biotech 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.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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