Correlation Between Bloomage Biotechnology and China Building
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By analyzing existing cross correlation between Bloomage Biotechnology Corp and China Building Material, you can compare the effects of market volatilities on Bloomage Biotechnology and China Building 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 China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomage Biotechnology and China Building.
Diversification Opportunities for Bloomage Biotechnology and China Building
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bloomage and China is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bloomage Biotechnology Corp and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material 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 China Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of Bloomage Biotechnology i.e., Bloomage Biotechnology and China Building go up and down completely randomly.
Pair Corralation between Bloomage Biotechnology and China Building
Assuming the 90 days trading horizon Bloomage Biotechnology Corp is expected to under-perform the China Building. In addition to that, Bloomage Biotechnology is 2.7 times more volatile than China Building Material. It trades about -0.24 of its total potential returns per unit of risk. China Building Material is currently generating about 0.71 per unit of volatility. 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 |
Bloomage Biotechnology Corp vs. China Building Material
Performance |
| Timeline |
| Bloomage Biotechnology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| China Building Material |
Risk-Adjusted Performance
Excellent
Weak | Strong |
Bloomage Biotechnology and China Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomage Biotechnology and China Building
The main advantage of trading using opposite Bloomage Biotechnology and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomage Biotechnology position performs unexpectedly, China Building 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 China Building will offset losses from the drop in China Building's long position.The idea behind Bloomage Biotechnology Corp and China Building Material 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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