Correlation Between Shanghai Allist and BridgeBio Pharma

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Can any of the company-specific risk be diversified away by investing in both Shanghai Allist and BridgeBio Pharma 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 Shanghai Allist and BridgeBio Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shanghai Allist Pharmaceuticals and BridgeBio Pharma, you can compare the effects of market volatilities on Shanghai Allist and BridgeBio Pharma 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 Shanghai Allist with a short position of BridgeBio Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Allist and BridgeBio Pharma.

Diversification Opportunities for Shanghai Allist and BridgeBio Pharma

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Shanghai and BridgeBio is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Allist Pharmaceutical and BridgeBio Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BridgeBio Pharma and Shanghai Allist 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 Shanghai Allist Pharmaceuticals are associated (or correlated) with BridgeBio Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BridgeBio Pharma has no effect on the direction of Shanghai Allist i.e., Shanghai Allist and BridgeBio Pharma go up and down completely randomly.

Pair Corralation between Shanghai Allist and BridgeBio Pharma

Assuming the 90 days trading horizon Shanghai Allist Pharmaceuticals is expected to under-perform the BridgeBio Pharma. But the stock apears to be less risky and, when comparing its historical volatility, Shanghai Allist Pharmaceuticals is 1.54 times less risky than BridgeBio Pharma. The stock trades about -0.11 of its potential returns per unit of risk. The BridgeBio Pharma is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,296  in BridgeBio Pharma on September 10, 2025 and sell it today you would earn a total of  1,871  from holding BridgeBio Pharma or generate 35.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy92.19%
ValuesDaily Returns

Shanghai Allist Pharmaceutical  vs.  BridgeBio Pharma

 Performance 
       Timeline  
Shanghai Allist Phar 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Shanghai Allist Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long term up-swing for the company investors.
BridgeBio Pharma 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in BridgeBio Pharma are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, BridgeBio Pharma displayed solid returns over the last few months and may actually be approaching a breakup point.

Shanghai Allist and BridgeBio Pharma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shanghai Allist and BridgeBio Pharma

The main advantage of trading using opposite Shanghai Allist and BridgeBio Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Allist position performs unexpectedly, BridgeBio Pharma 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 BridgeBio Pharma will offset losses from the drop in BridgeBio Pharma's long position.
The idea behind Shanghai Allist Pharmaceuticals and BridgeBio Pharma 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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