Correlation Between IQVIA Holdings and Burning Rock

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

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

Diversification Opportunities for IQVIA Holdings and Burning Rock

-0.28

Correlation Coefficient

IQVIA Holdings  Burning Rock

Very good diversification

The 3 months correlation between IQVIA and Burning is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IQVIA Holdings and Burning Rock BiotechLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burning Rock BiotechLtd and IQVIA Holdings 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 IQVIA Holdings are associated (or correlated) with Burning Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burning Rock BiotechLtd has no effect on the direction of IQVIA Holdings i.e., IQVIA Holdings and Burning Rock go up and down completely randomly.

Pair Corralation between IQVIA Holdings and Burning Rock

Considering the 90-day investment horizon IQVIA Holdings is expected to under-perform the Burning Rock. But the stock apears to be less risky and, when comparing its historical volatility, IQVIA Holdings is 3.24 times less risky than Burning Rock. The stock trades about -0.15 of its potential returns per unit of risk. The Burning Rock BiotechLtd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  728.00  in Burning Rock BiotechLtd on February 27, 2024 and sell it today you would earn a total of  27.00  from holding Burning Rock BiotechLtd or generate 3.71% return on investment over 90 days.

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

IQVIA Holdings  vs.  Burning Rock BiotechLtd

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Burning Rock BiotechLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burning Rock BiotechLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Burning Rock is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with IQVIA Holdings and Burning Rock

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

The idea behind IQVIA Holdings and Burning Rock BiotechLtd 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.