Correlation Between Zealand Pharma and Sino Biopharmaceutica
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma and Sino Biopharmaceutica 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 Zealand Pharma and Sino Biopharmaceutica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and Sino Biopharmaceutical Ltd, you can compare the effects of market volatilities on Zealand Pharma and Sino Biopharmaceutica 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 Zealand Pharma with a short position of Sino Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and Sino Biopharmaceutica.
Diversification Opportunities for Zealand Pharma and Sino Biopharmaceutica
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zealand and Sino is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma AS and Sino Biopharmaceutical Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Biopharmaceutical and Zealand Pharma 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 Zealand Pharma AS are associated (or correlated) with Sino Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Biopharmaceutical has no effect on the direction of Zealand Pharma i.e., Zealand Pharma and Sino Biopharmaceutica go up and down completely randomly.
Pair Corralation between Zealand Pharma and Sino Biopharmaceutica
Assuming the 90 days horizon Zealand Pharma AS is expected to generate 1.36 times more return on investment than Sino Biopharmaceutica. However, Zealand Pharma is 1.36 times more volatile than Sino Biopharmaceutical Ltd. It trades about 0.1 of its potential returns per unit of risk. Sino Biopharmaceutical Ltd is currently generating about 0.01 per unit of risk. If you would invest 4,166 in Zealand Pharma AS on September 14, 2024 and sell it today you would earn a total of 7,283 from holding Zealand Pharma AS or generate 174.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 63.2% |
| Values | Daily Returns |
Zealand Pharma AS vs. Sino Biopharmaceutical Ltd
Performance |
| Timeline |
| Zealand Pharma AS |
| Sino Biopharmaceutical |
Zealand Pharma and Sino Biopharmaceutica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zealand Pharma and Sino Biopharmaceutica
The main advantage of trading using opposite Zealand Pharma and Sino Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma position performs unexpectedly, Sino Biopharmaceutica 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 Sino Biopharmaceutica will offset losses from the drop in Sino Biopharmaceutica's long position.| Zealand Pharma vs. Sino Biopharmaceutical Ltd | Zealand Pharma vs. Defence Therapeutics | Zealand Pharma vs. Aileron Therapeutics | Zealand Pharma vs. Enlivex Therapeutics |
| Sino Biopharmaceutica vs. Institute of Biomedical | Sino Biopharmaceutica vs. Defence Therapeutics | Sino Biopharmaceutica vs. Aileron Therapeutics | Sino Biopharmaceutica 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 Stocks Directory module to find actively traded stocks across global markets.
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