Correlation Between Immunitybio and Shenzhen Investment

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

By analyzing existing cross correlation between Immunitybio and Shenzhen Investment Bay, you can compare the effects of market volatilities on Immunitybio and Shenzhen Investment 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 Immunitybio with a short position of Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immunitybio and Shenzhen Investment.

Diversification Opportunities for Immunitybio and Shenzhen Investment

0.72

Correlation Coefficient

Immunitybio  Shenzhen Investment

Poor diversification

The 3 months correlation between Immunitybio and Shenzhen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Immunitybio and Shenzhen Investment Bay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment Bay and Immunitybio 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 Immunitybio are associated (or correlated) with Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment Bay has no effect on the direction of Immunitybio i.e., Immunitybio and Shenzhen Investment go up and down completely randomly.

Pair Corralation between Immunitybio and Shenzhen Investment

Given the investment horizon of 90 days Immunitybio is expected to generate 1.45 times less return on investment than Shenzhen Investment. But when comparing it to its historical volatility, Immunitybio is 1.55 times less risky than Shenzhen Investment. It trades about 0.09 of its potential returns per unit of risk. Shenzhen Investment Bay is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  202.00  in Shenzhen Investment Bay on September 13, 2024 and sell it today you would earn a total of  60.00  from holding Shenzhen Investment Bay or generate 29.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Immunitybio  vs.  Shenzhen Investment Bay

Immunitybio

Risk-Adjusted Performance

7 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Immunitybio are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Immunitybio showed solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Investment Bay

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Investment Bay are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Shenzhen Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Immunitybio and Shenzhen Investment

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

The idea behind Immunitybio and Shenzhen Investment Bay 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.