Correlation Between Bloomage Biotechnology and PetroChina

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Can any of the company-specific risk be diversified away by investing in both Bloomage Biotechnology and PetroChina 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 PetroChina 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 PetroChina Co Ltd, you can compare the effects of market volatilities on Bloomage Biotechnology and PetroChina 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 PetroChina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomage Biotechnology and PetroChina.

Diversification Opportunities for Bloomage Biotechnology and PetroChina

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bloomage and PetroChina is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bloomage Biotechnology Corp and PetroChina Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina 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 PetroChina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina has no effect on the direction of Bloomage Biotechnology i.e., Bloomage Biotechnology and PetroChina go up and down completely randomly.

Pair Corralation between Bloomage Biotechnology and PetroChina

Assuming the 90 days trading horizon Bloomage Biotechnology Corp is expected to under-perform the PetroChina. In addition to that, Bloomage Biotechnology is 1.81 times more volatile than PetroChina Co Ltd. It trades about -0.18 of its total potential returns per unit of risk. PetroChina Co Ltd is currently generating about 0.13 per unit of volatility. If you would invest  809.00  in PetroChina Co Ltd on September 12, 2024 and sell it today you would earn a total of  27.00  from holding PetroChina Co Ltd or generate 3.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bloomage Biotechnology Corp  vs.  PetroChina Co Ltd

 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.
PetroChina 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PetroChina Co Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PetroChina may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bloomage Biotechnology and PetroChina Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bloomage Biotechnology and PetroChina

The main advantage of trading using opposite Bloomage Biotechnology and PetroChina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomage Biotechnology position performs unexpectedly, PetroChina 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 PetroChina will offset losses from the drop in PetroChina's long position.
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The idea behind Bloomage Biotechnology Corp and PetroChina Co Ltd 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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