Correlation Between CNOOC and Bloomage Biotechnology

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

Diversification Opportunities for CNOOC and Bloomage Biotechnology

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CNOOC and Bloomage is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CNOOC Limited and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and CNOOC 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 CNOOC Limited 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 CNOOC i.e., CNOOC and Bloomage Biotechnology go up and down completely randomly.

Pair Corralation between CNOOC and Bloomage Biotechnology

Assuming the 90 days trading horizon CNOOC Limited is expected to generate 0.85 times more return on investment than Bloomage Biotechnology. However, CNOOC Limited is 1.18 times less risky than Bloomage Biotechnology. It trades about -0.18 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.15 per unit of risk. If you would invest  2,888  in CNOOC Limited on November 2, 2024 and sell it today you would lose (137.00) from holding CNOOC Limited or give up 4.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CNOOC Limited  vs.  Bloomage Biotechnology Corp

 Performance 
       Timeline  
CNOOC Limited 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CNOOC Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CNOOC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CNOOC and Bloomage Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CNOOC and Bloomage Biotechnology

The main advantage of trading using opposite CNOOC and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNOOC 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 CNOOC Limited 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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Check out your portfolio center.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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