Correlation Between Bloomage Biotechnology and Gifore Agricultural

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

Diversification Opportunities for Bloomage Biotechnology and Gifore Agricultural

-0.27

Correlation Coefficient

Bloomage Biotechnology  Gifore Agricultural

Very good diversification

The 3 months correlation between Bloomage and Gifore is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bloomage Biotechnology Corp and Gifore Agricultural Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gifore Agricultural 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 Gifore Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gifore Agricultural has no effect on the direction of Bloomage Biotechnology i.e., Bloomage Biotechnology and Gifore Agricultural go up and down completely randomly.

Pair Corralation between Bloomage Biotechnology and Gifore Agricultural

Assuming the 90 days trading horizon Bloomage Biotechnology Corp is expected to under-perform the Gifore Agricultural. But the stock apears to be less risky and, when comparing its historical volatility, Bloomage Biotechnology Corp is 1.22 times less risky than Gifore Agricultural. The stock trades about -0.22 of its potential returns per unit of risk. The Gifore Agricultural Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  490.00  in Gifore Agricultural Machinery on October 8, 2024 and sell it today you would lose (2.00) from holding Gifore Agricultural Machinery or give up 0.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bloomage Biotechnology Corp  vs.  Gifore Agricultural Machinery

Bloomage Biotechnology

Risk-Adjusted Performance

0 of 100

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.

Gifore Agricultural

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gifore Agricultural Machinery are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Gifore Agricultural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bloomage Biotechnology and Gifore Agricultural

The main advantage of trading using opposite Bloomage Biotechnology and Gifore Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomage Biotechnology position performs unexpectedly, Gifore Agricultural 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 Gifore Agricultural will offset losses from the drop in Gifore Agricultural's long position.

The idea behind Bloomage Biotechnology Corp and Gifore Agricultural Machinery 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.