Correlation Between Sino Biopharmaceutica and ALK-Abelló A/S
Can any of the company-specific risk be diversified away by investing in both Sino Biopharmaceutica and ALK-Abelló A/S 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 Sino Biopharmaceutica and ALK-Abelló A/S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino Biopharmaceutical Ltd and ALK Abell AS, you can compare the effects of market volatilities on Sino Biopharmaceutica and ALK-Abelló A/S 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 Sino Biopharmaceutica with a short position of ALK-Abelló A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Biopharmaceutica and ALK-Abelló A/S.
Diversification Opportunities for Sino Biopharmaceutica and ALK-Abelló A/S
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sino and ALK-Abelló is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sino Biopharmaceutical Ltd and ALK Abell AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALK-Abelló A/S and Sino Biopharmaceutica 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 Sino Biopharmaceutical Ltd are associated (or correlated) with ALK-Abelló A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALK-Abelló A/S has no effect on the direction of Sino Biopharmaceutica i.e., Sino Biopharmaceutica and ALK-Abelló A/S go up and down completely randomly.
Pair Corralation between Sino Biopharmaceutica and ALK-Abelló A/S
Assuming the 90 days horizon Sino Biopharmaceutical Ltd is expected to under-perform the ALK-Abelló A/S. In addition to that, Sino Biopharmaceutica is 1.14 times more volatile than ALK Abell AS. It trades about -0.23 of its total potential returns per unit of risk. ALK Abell AS is currently generating about -0.22 per unit of volatility. If you would invest 2,235 in ALK Abell AS on November 6, 2024 and sell it today you would lose (205.00) from holding ALK Abell AS or give up 9.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sino Biopharmaceutical Ltd vs. ALK Abell AS
Performance |
| Timeline |
| Sino Biopharmaceutical |
| ALK-Abelló A/S |
Sino Biopharmaceutica and ALK-Abelló A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Biopharmaceutica and ALK-Abelló A/S
The main advantage of trading using opposite Sino Biopharmaceutica and ALK-Abelló A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Biopharmaceutica position performs unexpectedly, ALK-Abelló A/S 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 ALK-Abelló A/S will offset losses from the drop in ALK-Abelló A/S's long position.| Sino Biopharmaceutica vs. Institute of Biomedical | Sino Biopharmaceutica vs. Defence Therapeutics | Sino Biopharmaceutica vs. Enlivex Therapeutics | Sino Biopharmaceutica vs. Protagenic Therapeutics |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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