Correlation Between Sino Biopharmaceutica and Defence Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sino Biopharmaceutica and Defence Therapeutics 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 Defence Therapeutics 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 Defence Therapeutics, you can compare the effects of market volatilities on Sino Biopharmaceutica and Defence Therapeutics 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 Defence Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Biopharmaceutica and Defence Therapeutics.
Diversification Opportunities for Sino Biopharmaceutica and Defence Therapeutics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sino and Defence is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sino Biopharmaceutical Ltd and Defence Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defence Therapeutics 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 Defence Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defence Therapeutics has no effect on the direction of Sino Biopharmaceutica i.e., Sino Biopharmaceutica and Defence Therapeutics go up and down completely randomly.
Pair Corralation between Sino Biopharmaceutica and Defence Therapeutics
If you would invest 41.00 in Defence Therapeutics on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Defence Therapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Biopharmaceutical Ltd vs. Defence Therapeutics
Performance |
| Timeline |
| Sino Biopharmaceutical |
| Defence Therapeutics |
Sino Biopharmaceutica and Defence Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Biopharmaceutica and Defence Therapeutics
The main advantage of trading using opposite Sino Biopharmaceutica and Defence Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Biopharmaceutica position performs unexpectedly, Defence Therapeutics 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 Defence Therapeutics will offset losses from the drop in Defence Therapeutics' long position.| Sino Biopharmaceutica vs. Rigel Pharmaceuticals | Sino Biopharmaceutica vs. Geron | Sino Biopharmaceutica vs. Verastem | Sino Biopharmaceutica vs. Immutep Ltd ADR |
| Defence Therapeutics vs. Sino Biopharmaceutical Ltd | Defence Therapeutics vs. Institute of Biomedical | Defence Therapeutics vs. Aileron Therapeutics | Defence Therapeutics vs. Enlivex Therapeutics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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