Correlation Between Bloomage Biotechnology and Qinghaihuading Industrial

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

Diversification Opportunities for Bloomage Biotechnology and Qinghaihuading Industrial

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bloomage and Qinghaihuading is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bloomage Biotechnology Corp and Qinghaihuading Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qinghaihuading Industrial and Bloomage Biotechnology 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 Bloomage Biotechnology Corp are associated (or correlated) with Qinghaihuading Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qinghaihuading Industrial has no effect on the direction of Bloomage Biotechnology i.e., Bloomage Biotechnology and Qinghaihuading Industrial go up and down completely randomly.

Pair Corralation between Bloomage Biotechnology and Qinghaihuading Industrial

Assuming the 90 days trading horizon Bloomage Biotechnology Corp is expected to under-perform the Qinghaihuading Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Bloomage Biotechnology Corp is 1.81 times less risky than Qinghaihuading Industrial. The stock trades about -0.18 of its potential returns per unit of risk. The Qinghaihuading Industrial Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  477.00  in Qinghaihuading Industrial Co on September 12, 2024 and sell it today you would earn a total of  105.00  from holding Qinghaihuading Industrial Co or generate 22.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Bloomage Biotechnology Corp  vs.  Qinghaihuading Industrial Co

 Performance 
       Timeline  
Bloomage Biotechnology 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bloomage Biotechnology Corp are ranked lower than 8 (%) 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.
Qinghaihuading Industrial 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Qinghaihuading Industrial Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qinghaihuading Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Bloomage Biotechnology and Qinghaihuading Industrial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bloomage Biotechnology and Qinghaihuading Industrial

The main advantage of trading using opposite Bloomage Biotechnology and Qinghaihuading Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomage Biotechnology position performs unexpectedly, Qinghaihuading Industrial 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 Qinghaihuading Industrial will offset losses from the drop in Qinghaihuading Industrial's long position.
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The idea behind Bloomage Biotechnology Corp and Qinghaihuading Industrial Co 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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