Correlation Between Sino Biopharmaceutica and Rigel Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Sino Biopharmaceutica and Rigel Pharmaceuticals 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 Rigel Pharmaceuticals 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 Rigel Pharmaceuticals, you can compare the effects of market volatilities on Sino Biopharmaceutica and Rigel Pharmaceuticals 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 Rigel Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Biopharmaceutica and Rigel Pharmaceuticals.
Diversification Opportunities for Sino Biopharmaceutica and Rigel Pharmaceuticals
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sino and Rigel is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sino Biopharmaceutical Ltd and Rigel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rigel Pharmaceuticals 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 Rigel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rigel Pharmaceuticals has no effect on the direction of Sino Biopharmaceutica i.e., Sino Biopharmaceutica and Rigel Pharmaceuticals go up and down completely randomly.
Pair Corralation between Sino Biopharmaceutica and Rigel Pharmaceuticals
Assuming the 90 days horizon Sino Biopharmaceutica is expected to generate 2.89 times less return on investment than Rigel Pharmaceuticals. But when comparing it to its historical volatility, Sino Biopharmaceutical Ltd is 1.87 times less risky than Rigel Pharmaceuticals. It trades about 0.07 of its potential returns per unit of risk. Rigel Pharmaceuticals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,260 in Rigel Pharmaceuticals on September 3, 2024 and sell it today you would earn a total of 1,501 from holding Rigel Pharmaceuticals or generate 119.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.13% |
| Values | Daily Returns |
Sino Biopharmaceutical Ltd vs. Rigel Pharmaceuticals
Performance |
| Timeline |
| Sino Biopharmaceutical |
| Rigel Pharmaceuticals |
Sino Biopharmaceutica and Rigel Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Biopharmaceutica and Rigel Pharmaceuticals
The main advantage of trading using opposite Sino Biopharmaceutica and Rigel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Biopharmaceutica position performs unexpectedly, Rigel Pharmaceuticals 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 Rigel Pharmaceuticals will offset losses from the drop in Rigel Pharmaceuticals' long position.| Sino Biopharmaceutica vs. Institute of Biomedical | Sino Biopharmaceutica vs. Defence Therapeutics | Sino Biopharmaceutica vs. Aileron Therapeutics | Sino Biopharmaceutica vs. Enlivex Therapeutics |
| Rigel Pharmaceuticals vs. Fortress Biotech | Rigel Pharmaceuticals vs. Reviva Pharmaceuticals Holdings | Rigel Pharmaceuticals vs. Pieris Pharmaceuticals | Rigel Pharmaceuticals vs. Cidara 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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