Correlation Between Bloomage Biotechnology and Zhuhai Comleader

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

Diversification Opportunities for Bloomage Biotechnology and Zhuhai Comleader

0.52

Correlation Coefficient

Bloomage Biotechnology  Zhuhai Comleader

Very weak diversification

The 3 months correlation between Bloomage and Zhuhai is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bloomage Biotechnology Corp and Zhuhai Comleader Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhuhai Comleader Inf 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 Zhuhai Comleader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhuhai Comleader Inf has no effect on the direction of Bloomage Biotechnology i.e., Bloomage Biotechnology and Zhuhai Comleader go up and down completely randomly.

Pair Corralation between Bloomage Biotechnology and Zhuhai Comleader

Assuming the 90 days trading horizon Bloomage Biotechnology Corp is expected to under-perform the Zhuhai Comleader. But the stock apears to be less risky and, when comparing its historical volatility, Bloomage Biotechnology Corp is 1.61 times less risky than Zhuhai Comleader. The stock trades about -0.19 of its potential returns per unit of risk. The Zhuhai Comleader Information is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,784  in Zhuhai Comleader Information on September 21, 2024 and sell it today you would earn a total of  295.00  from holding Zhuhai Comleader Information or generate 16.54% return on investment over 90 days.

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

Bloomage Biotechnology Corp  vs.  Zhuhai Comleader Information

Bloomage Biotechnology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bloomage Biotechnology Corp are ranked lower than 7 (%) 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.

Zhuhai Comleader Inf

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zhuhai Comleader Information are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zhuhai Comleader sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bloomage Biotechnology and Zhuhai Comleader

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

The idea behind Bloomage Biotechnology Corp and Zhuhai Comleader Information 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.