Correlation Between Regen BioPharma and WuXi Biologics
Can any of the company-specific risk be diversified away by investing in both Regen BioPharma and WuXi Biologics 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 Regen BioPharma and WuXi Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regen BioPharma and WuXi Biologics, you can compare the effects of market volatilities on Regen BioPharma and WuXi Biologics 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 Regen BioPharma with a short position of WuXi Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regen BioPharma and WuXi Biologics.
Diversification Opportunities for Regen BioPharma and WuXi Biologics
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regen and WuXi is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Regen BioPharma and WuXi Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Biologics and Regen BioPharma 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 Regen BioPharma are associated (or correlated) with WuXi Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Biologics has no effect on the direction of Regen BioPharma i.e., Regen BioPharma and WuXi Biologics go up and down completely randomly.
Pair Corralation between Regen BioPharma and WuXi Biologics
Given the investment horizon of 90 days Regen BioPharma is expected to generate 4.46 times more return on investment than WuXi Biologics. However, Regen BioPharma is 4.46 times more volatile than WuXi Biologics. It trades about 0.06 of its potential returns per unit of risk. WuXi Biologics is currently generating about -0.04 per unit of risk. If you would invest 94.00 in Regen BioPharma on September 4, 2024 and sell it today you would lose (88.49) from holding Regen BioPharma or give up 94.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regen BioPharma vs. WuXi Biologics
Performance |
| Timeline |
| Regen BioPharma |
| WuXi Biologics |
Regen BioPharma and WuXi Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regen BioPharma and WuXi Biologics
The main advantage of trading using opposite Regen BioPharma and WuXi Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regen BioPharma position performs unexpectedly, WuXi Biologics 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 Biologics will offset losses from the drop in WuXi Biologics' long position.| Regen BioPharma vs. Oncology Pharma | Regen BioPharma vs. Creative Medical Technology | Regen BioPharma vs. Therasense | Regen BioPharma vs. Enzolytics |
| WuXi Biologics vs. Therapeutic Solutions International | WuXi Biologics vs. Alpha Cognition | WuXi Biologics vs. Vg Life Sciences | WuXi Biologics vs. Adagene |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |