Correlation Between HeNan Splendor and Bloomage Biotechnology

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

Diversification Opportunities for HeNan Splendor and Bloomage Biotechnology

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between HeNan and Bloomage is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding HeNan Splendor Science and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and HeNan Splendor 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 HeNan Splendor Science are associated (or correlated) with Bloomage Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomage Biotechnology has no effect on the direction of HeNan Splendor i.e., HeNan Splendor and Bloomage Biotechnology go up and down completely randomly.

Pair Corralation between HeNan Splendor and Bloomage Biotechnology

Assuming the 90 days trading horizon HeNan Splendor Science is expected to generate 1.92 times more return on investment than Bloomage Biotechnology. However, HeNan Splendor is 1.92 times more volatile than Bloomage Biotechnology Corp. It trades about 0.0 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.17 per unit of risk. If you would invest  1,065  in HeNan Splendor Science on September 29, 2024 and sell it today you would lose (17.00) from holding HeNan Splendor Science or give up 1.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

HeNan Splendor Science  vs.  Bloomage Biotechnology Corp

 Performance 
       Timeline  
HeNan Splendor Science 

Risk-Adjusted Performance

5 of 100

 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in HeNan Splendor Science are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HeNan Splendor sustained solid returns over the last few months and may actually be approaching a breakup point.
Bloomage Biotechnology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bloomage Biotechnology Corp 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 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

HeNan Splendor and Bloomage Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HeNan Splendor and Bloomage Biotechnology

The main advantage of trading using opposite HeNan Splendor and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HeNan Splendor position performs unexpectedly, Bloomage Biotechnology 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 Bloomage Biotechnology will offset losses from the drop in Bloomage Biotechnology's long position.
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The idea behind HeNan Splendor Science and Bloomage Biotechnology Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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