Correlation Between WuXi Biologics and Ginkgo Bioworks
Can any of the company-specific risk be diversified away by investing in both WuXi Biologics and Ginkgo Bioworks 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 Biologics and Ginkgo Bioworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi Biologics and Ginkgo Bioworks Holdings, you can compare the effects of market volatilities on WuXi Biologics and Ginkgo Bioworks 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 Biologics with a short position of Ginkgo Bioworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Biologics and Ginkgo Bioworks.
Diversification Opportunities for WuXi Biologics and Ginkgo Bioworks
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WuXi and Ginkgo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Biologics and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings and WuXi Biologics 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 Biologics are associated (or correlated) with Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of WuXi Biologics i.e., WuXi Biologics and Ginkgo Bioworks go up and down completely randomly.
Pair Corralation between WuXi Biologics and Ginkgo Bioworks
Assuming the 90 days horizon WuXi Biologics is expected to under-perform the Ginkgo Bioworks. In addition to that, WuXi Biologics is 1.09 times more volatile than Ginkgo Bioworks Holdings. It trades about -0.19 of its total potential returns per unit of risk. Ginkgo Bioworks Holdings is currently generating about -0.07 per unit of volatility. If you would invest 139.00 in Ginkgo Bioworks Holdings on January 25, 2024 and sell it today you would lose (54.42) from holding Ginkgo Bioworks Holdings or give up 39.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
WuXi Biologics vs. Ginkgo Bioworks Holdings
Performance |
Timeline |
WuXi Biologics |
Ginkgo Bioworks Holdings |
WuXi Biologics and Ginkgo Bioworks Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WuXi Biologics and Ginkgo Bioworks
The main advantage of trading using opposite WuXi Biologics and Ginkgo Bioworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi Biologics position performs unexpectedly, Ginkgo Bioworks 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 Ginkgo Bioworks will offset losses from the drop in Ginkgo Bioworks' long position.WuXi Biologics vs. Mymetics Corp | WuXi Biologics vs. HUMANA INC | WuXi Biologics vs. Aquagold International | WuXi Biologics vs. Barloworld Ltd ADR |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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