Correlation Between BeiGene and Alexion Pharmaceuticals

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

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

Diversification Opportunities for BeiGene and Alexion Pharmaceuticals

0.0

Correlation Coefficient

BeiGene  Alexion Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between BeiGene and Alexion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BeiGene and Alexion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexion Pharmaceuticals and BeiGene 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 BeiGene are associated (or correlated) with Alexion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexion Pharmaceuticals has no effect on the direction of BeiGene i.e., BeiGene and Alexion Pharmaceuticals go up and down completely randomly.

Pair Corralation between BeiGene and Alexion Pharmaceuticals

If you would invest (100.00) in Alexion Pharmaceuticals on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Alexion Pharmaceuticals or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BeiGene  vs.  Alexion Pharmaceuticals

BeiGene

Risk-Adjusted Performance

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Very Weak

Over the last 90 days BeiGene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Alexion Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexion Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alexion Pharmaceuticals is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BeiGene and Alexion Pharmaceuticals

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

The idea behind BeiGene and Alexion Pharmaceuticals 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.