Correlation Between China Infrastructure and Bionoid Pharma
Can any of the company-specific risk be diversified away by investing in both China Infrastructure and Bionoid Pharma 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 China Infrastructure and Bionoid Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Infrastructure Construction and Bionoid Pharma, you can compare the effects of market volatilities on China Infrastructure and Bionoid Pharma 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 China Infrastructure with a short position of Bionoid Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Infrastructure and Bionoid Pharma.
Diversification Opportunities for China Infrastructure and Bionoid Pharma
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Bionoid is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding China Infrastructure Construct and Bionoid Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionoid Pharma and China Infrastructure 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 China Infrastructure Construction are associated (or correlated) with Bionoid Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionoid Pharma has no effect on the direction of China Infrastructure i.e., China Infrastructure and Bionoid Pharma go up and down completely randomly.
Pair Corralation between China Infrastructure and Bionoid Pharma
Given the investment horizon of 90 days China Infrastructure is expected to generate 22.79 times less return on investment than Bionoid Pharma. But when comparing it to its historical volatility, China Infrastructure Construction is 3.85 times less risky than Bionoid Pharma. It trades about 0.01 of its potential returns per unit of risk. Bionoid Pharma is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Bionoid Pharma on August 26, 2024 and sell it today you would lose (98.00) from holding Bionoid Pharma or give up 83.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.99% |
| Values | Daily Returns |
China Infrastructure Construct vs. Bionoid Pharma
Performance |
| Timeline |
| China Infrastructure |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bionoid Pharma |
China Infrastructure and Bionoid Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Infrastructure and Bionoid Pharma
The main advantage of trading using opposite China Infrastructure and Bionoid Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Infrastructure position performs unexpectedly, Bionoid Pharma 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 Bionoid Pharma will offset losses from the drop in Bionoid Pharma's long position.| China Infrastructure vs. Medicine Man Technologies | China Infrastructure vs. Kona Gold Solutions | China Infrastructure vs. Green Thumb Industries | China Infrastructure vs. Cann American Corp |
| Bionoid Pharma vs. Aerofoam Metals | Bionoid Pharma vs. Zijin Mining Group | Bionoid Pharma vs. Bridgford Foods | Bionoid Pharma vs. Hf Foods Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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