Correlation Between Volitionrx and Burning Rock
Can any of the company-specific risk be diversified away by investing in both Volitionrx 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 Volitionrx and Burning Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volitionrx and Burning Rock Biotech, you can compare the effects of market volatilities on Volitionrx 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 Volitionrx with a short position of Burning Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volitionrx and Burning Rock.
Diversification Opportunities for Volitionrx and Burning Rock
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Volitionrx and Burning is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Volitionrx 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 Volitionrx 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 Volitionrx 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 Volitionrx i.e., Volitionrx and Burning Rock go up and down completely randomly.
Pair Corralation between Volitionrx and Burning Rock
Given the investment horizon of 90 days Volitionrx is expected to generate 5.16 times less return on investment than Burning Rock. But when comparing it to its historical volatility, Volitionrx is 1.7 times less risky than Burning Rock. It trades about 0.13 of its potential returns per unit of risk. Burning Rock Biotech is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Burning Rock Biotech on September 2, 2024 and sell it today you would earn a total of 336.00 from holding Burning Rock Biotech or generate 120.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volitionrx vs. Burning Rock Biotech
Performance |
| Timeline |
| Volitionrx |
| Burning Rock Biotech |
Volitionrx and Burning Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volitionrx and Burning Rock
The main advantage of trading using opposite Volitionrx and Burning Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volitionrx 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.| Volitionrx vs. Profound Medical Corp | Volitionrx vs. Si Bone | Volitionrx vs. Nevro Corp | Volitionrx vs. Orthopediatrics Corp |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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