Correlation Between WuXi AppTec and Telo Genomics
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec and Telo Genomics 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 WuXi AppTec and Telo Genomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi AppTec Co and Telo Genomics Corp, you can compare the effects of market volatilities on WuXi AppTec and Telo Genomics 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 WuXi AppTec with a short position of Telo Genomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and Telo Genomics.
Diversification Opportunities for WuXi AppTec and Telo Genomics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WuXi and Telo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co and Telo Genomics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telo Genomics Corp and WuXi AppTec 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 WuXi AppTec Co are associated (or correlated) with Telo Genomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telo Genomics Corp has no effect on the direction of WuXi AppTec i.e., WuXi AppTec and Telo Genomics go up and down completely randomly.
Pair Corralation between WuXi AppTec and Telo Genomics
Assuming the 90 days horizon WuXi AppTec is expected to generate 21.55 times less return on investment than Telo Genomics. But when comparing it to its historical volatility, WuXi AppTec Co is 3.47 times less risky than Telo Genomics. It trades about 0.01 of its potential returns per unit of risk. Telo Genomics Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Telo Genomics Corp on August 29, 2024 and sell it today you would lose (12.10) from holding Telo Genomics Corp or give up 67.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WuXi AppTec Co vs. Telo Genomics Corp
Performance |
| Timeline |
| WuXi AppTec |
| Telo Genomics Corp |
WuXi AppTec and Telo Genomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and Telo Genomics
The main advantage of trading using opposite WuXi AppTec and Telo Genomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec position performs unexpectedly, Telo Genomics 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 Telo Genomics will offset losses from the drop in Telo Genomics' long position.| WuXi AppTec vs. RYU Apparel | WuXi AppTec vs. PLAY2CHILL SA ZY | WuXi AppTec vs. Columbia Sportswear | WuXi AppTec vs. URBAN OUTFITTERS |
| Telo Genomics vs. SANOK RUBBER ZY | Telo Genomics vs. Singapore Airlines Limited | Telo Genomics vs. SINGAPORE AIRLINES | Telo Genomics vs. Martin Marietta Materials |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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