Correlation Between BIORA THERAPEUTNEW and WUXI BIOLOGICS

Can any of the company-specific risk be diversified away by investing in both BIORA THERAPEUTNEW and WUXI BIOLOGICS 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 BIORA THERAPEUTNEW and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BIORA THERAPEUTNEW 001 and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on BIORA THERAPEUTNEW and WUXI BIOLOGICS 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 BIORA THERAPEUTNEW with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIORA THERAPEUTNEW and WUXI BIOLOGICS.

Diversification Opportunities for BIORA THERAPEUTNEW and WUXI BIOLOGICS

0.07

Correlation Coefficient

BIORA THERAPEUTNEW  WUXI BIOLOGICS

Significant diversification

The 3 months correlation between BIORA and WUXI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BIORA THERAPEUTNEW 001 and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 and BIORA THERAPEUTNEW 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 BIORA THERAPEUTNEW 001 are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of BIORA THERAPEUTNEW i.e., BIORA THERAPEUTNEW and WUXI BIOLOGICS go up and down completely randomly.

Pair Corralation between BIORA THERAPEUTNEW and WUXI BIOLOGICS

If you would invest  346.00  in WUXI BIOLOGICS UNSPADR2 on September 28, 2024 and sell it today you would earn a total of  82.00  from holding WUXI BIOLOGICS UNSPADR2 or generate 23.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

BIORA THERAPEUTNEW 001  vs.  WUXI BIOLOGICS UNSPADR2

BIORA THERAPEUTNEW 001

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BIORA THERAPEUTNEW 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, BIORA THERAPEUTNEW reported solid returns over the last few months and may actually be approaching a breakup point.

WUXI BIOLOGICS UNSPADR2

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WUXI BIOLOGICS UNSPADR2 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WUXI BIOLOGICS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BIORA THERAPEUTNEW and WUXI BIOLOGICS

The main advantage of trading using opposite BIORA THERAPEUTNEW and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIORA THERAPEUTNEW position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.

The idea behind BIORA THERAPEUTNEW 001 and WUXI BIOLOGICS UNSPADR2 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.