Correlation Between China Building and Bloomage Biotechnology
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By analyzing existing cross correlation between China Building Material and Bloomage Biotechnology Corp, you can compare the effects of market volatilities on China Building 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 China Building with a short position of Bloomage Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Building and Bloomage Biotechnology.
Diversification Opportunities for China Building and Bloomage Biotechnology
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Bloomage is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding China Building Material and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and China Building 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 China Building Material 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 China Building i.e., China Building and Bloomage Biotechnology go up and down completely randomly.
Pair Corralation between China Building and Bloomage Biotechnology
Assuming the 90 days trading horizon China Building Material is expected to generate 0.37 times more return on investment than Bloomage Biotechnology. However, China Building Material is 2.7 times less risky than Bloomage Biotechnology. It trades about 0.71 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.24 per unit of risk. If you would invest 709.00 in China Building Material on November 9, 2024 and sell it today you would earn a total of 6.00 from holding China Building Material or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 12.5% |
| Values | Daily Returns |
China Building Material vs. Bloomage Biotechnology Corp
Performance |
| Timeline |
| China Building Material |
Risk-Adjusted Performance
Excellent
Weak | Strong |
| Bloomage Biotechnology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
China Building and Bloomage Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Building and Bloomage Biotechnology
The main advantage of trading using opposite China Building and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Building 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.The idea behind China Building Material 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.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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