Correlation Between Allgens Medical and Bloomage Biotechnology

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

Diversification Opportunities for Allgens Medical and Bloomage Biotechnology

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Allgens and Bloomage is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Allgens Medical Technology and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and Allgens Medical 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 Allgens Medical Technology 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 Allgens Medical i.e., Allgens Medical and Bloomage Biotechnology go up and down completely randomly.

Pair Corralation between Allgens Medical and Bloomage Biotechnology

Assuming the 90 days trading horizon Allgens Medical Technology is expected to generate 1.15 times more return on investment than Bloomage Biotechnology. However, Allgens Medical is 1.15 times more volatile than Bloomage Biotechnology Corp. It trades about -0.02 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about -0.06 per unit of risk. If you would invest  2,694  in Allgens Medical Technology on October 27, 2024 and sell it today you would lose (985.00) from holding Allgens Medical Technology or give up 36.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Allgens Medical Technology  vs.  Bloomage Biotechnology Corp

 Performance 
       Timeline  
Allgens Medical Tech 

Risk-Adjusted Performance

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Over the last 90 days Allgens Medical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Allgens Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Bloomage Biotechnology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bloomage Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Allgens Medical and Bloomage Biotechnology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allgens Medical and Bloomage Biotechnology

The main advantage of trading using opposite Allgens Medical and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allgens Medical 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.
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The idea behind Allgens Medical Technology 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.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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