Correlation Between WuXi Biologics and Orgenesis

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

By analyzing existing cross correlation between WuXi Biologics and Orgenesis, you can compare the effects of market volatilities on WuXi Biologics and Orgenesis 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 Orgenesis. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi Biologics and Orgenesis.

Diversification Opportunities for WuXi Biologics and Orgenesis

-0.47

Correlation Coefficient

WuXi Biologics  Orgenesis

Very good diversification

The 3 months correlation between WuXi and Orgenesis is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding WuXi Biologics and Orgenesis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orgenesis 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 Orgenesis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orgenesis has no effect on the direction of WuXi Biologics i.e., WuXi Biologics and Orgenesis go up and down completely randomly.

Pair Corralation between WuXi Biologics and Orgenesis

Assuming the 90 days horizon WuXi Biologics is expected to under-perform the Orgenesis. But the pink sheet apears to be less risky and, when comparing its historical volatility, WuXi Biologics is 1.61 times less risky than Orgenesis. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Orgenesis is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  300.00  in Orgenesis on January 19, 2024 and sell it today you would lose (249.00) from holding Orgenesis or give up 83.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

WuXi Biologics  vs.  Orgenesis

WuXi Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WuXi Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Orgenesis

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orgenesis are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Orgenesis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WuXi Biologics and Orgenesis

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

The idea behind WuXi Biologics and Orgenesis 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..