Correlation Between Bloomage Biotechnology and Industrial
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By analyzing existing cross correlation between Bloomage Biotechnology Corp and Industrial and Commercial, you can compare the effects of market volatilities on Bloomage Biotechnology and 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomage Biotechnology and Industrial.
Diversification Opportunities for Bloomage Biotechnology and Industrial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bloomage and Industrial is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bloomage Biotechnology Corp and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Bloomage Biotechnology i.e., Bloomage Biotechnology and Industrial go up and down completely randomly.
Pair Corralation between Bloomage Biotechnology and Industrial
Assuming the 90 days trading horizon Bloomage Biotechnology Corp is expected to under-perform the Industrial. In addition to that, Bloomage Biotechnology is 2.29 times more volatile than Industrial and Commercial. It trades about -0.18 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about 0.24 per unit of volatility. If you would invest 600.00 in Industrial and Commercial on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Industrial and Commercial or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomage Biotechnology Corp vs. Industrial and Commercial
Performance |
| Timeline |
| Bloomage Biotechnology |
| Industrial and Commercial |
Bloomage Biotechnology and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomage Biotechnology and Industrial
The main advantage of trading using opposite Bloomage Biotechnology and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomage Biotechnology position performs unexpectedly, 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 Industrial will offset losses from the drop in Industrial's long position.The idea behind Bloomage Biotechnology Corp and Industrial and Commercial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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