Correlation Between Guangdong Marubi and Bloomage Biotechnology
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By analyzing existing cross correlation between Guangdong Marubi Biotechnology and Bloomage Biotechnology Corp, you can compare the effects of market volatilities on Guangdong Marubi 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 Guangdong Marubi with a short position of Bloomage Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Marubi and Bloomage Biotechnology.
Diversification Opportunities for Guangdong Marubi and Bloomage Biotechnology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guangdong and Bloomage is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Marubi Biotechnology and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and Guangdong Marubi 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 Guangdong Marubi Biotechnology 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 Guangdong Marubi i.e., Guangdong Marubi and Bloomage Biotechnology go up and down completely randomly.
Pair Corralation between Guangdong Marubi and Bloomage Biotechnology
Assuming the 90 days trading horizon Guangdong Marubi Biotechnology is expected to generate 1.0 times more return on investment than Bloomage Biotechnology. However, Guangdong Marubi Biotechnology is 1.0 times less risky than Bloomage Biotechnology. It trades about -0.01 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.07 per unit of risk. If you would invest 4,160 in Guangdong Marubi Biotechnology on November 9, 2024 and sell it today you would lose (970.00) from holding Guangdong Marubi Biotechnology or give up 23.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Marubi Biotechnology vs. Bloomage Biotechnology Corp
Performance |
| Timeline |
| Guangdong Marubi Bio |
Risk-Adjusted Performance
Weak
Weak | Strong |
| Bloomage Biotechnology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Guangdong Marubi and Bloomage Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Marubi and Bloomage Biotechnology
The main advantage of trading using opposite Guangdong Marubi and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Marubi 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 Guangdong Marubi Biotechnology 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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