Correlation Between Saurer Intelligent and Bloomage Biotechnology

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

Diversification Opportunities for Saurer Intelligent and Bloomage Biotechnology

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Saurer and Bloomage is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Saurer Intelligent Technology and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and Saurer Intelligent 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 Saurer Intelligent Technology 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 Saurer Intelligent i.e., Saurer Intelligent and Bloomage Biotechnology go up and down completely randomly.

Pair Corralation between Saurer Intelligent and Bloomage Biotechnology

Assuming the 90 days trading horizon Saurer Intelligent Technology is expected to generate 1.53 times more return on investment than Bloomage Biotechnology. However, Saurer Intelligent is 1.53 times more volatile than Bloomage Biotechnology Corp. It trades about 0.16 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.1 per unit of risk. If you would invest  194.00  in Saurer Intelligent Technology on August 29, 2024 and sell it today you would earn a total of  26.00  from holding Saurer Intelligent Technology or generate 13.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Saurer Intelligent Technology  vs.  Bloomage Biotechnology Corp

 Performance 
       Timeline  
Saurer Intelligent 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Saurer Intelligent Technology are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Saurer Intelligent sustained solid returns over the last few months and may actually be approaching a breakup point.
Bloomage Biotechnology 

Risk-Adjusted Performance

5 of 100

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

Saurer Intelligent and Bloomage Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Saurer Intelligent and Bloomage Biotechnology

The main advantage of trading using opposite Saurer Intelligent and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saurer Intelligent 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 Saurer Intelligent Technology 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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