Correlation Between Biwin Storage and Shanghai OPM

Can any of the company-specific risk be diversified away by investing in both Biwin Storage and Shanghai OPM 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 Biwin Storage and Shanghai OPM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Biwin Storage Technology and Shanghai OPM Biosciences, you can compare the effects of market volatilities on Biwin Storage and Shanghai OPM 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 Biwin Storage with a short position of Shanghai OPM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biwin Storage and Shanghai OPM.

Diversification Opportunities for Biwin Storage and Shanghai OPM

-0.26

Correlation Coefficient

Biwin Storage  Shanghai OPM

Very good diversification

The 3 months correlation between Biwin and Shanghai is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Biwin Storage Technology and Shanghai OPM Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai OPM Biosciences and Biwin Storage 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 Biwin Storage Technology are associated (or correlated) with Shanghai OPM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai OPM Biosciences has no effect on the direction of Biwin Storage i.e., Biwin Storage and Shanghai OPM go up and down completely randomly.

Pair Corralation between Biwin Storage and Shanghai OPM

Assuming the 90 days trading horizon Biwin Storage Technology is expected to under-perform the Shanghai OPM. In addition to that, Biwin Storage is 1.31 times more volatile than Shanghai OPM Biosciences. It trades about -0.19 of its total potential returns per unit of risk. Shanghai OPM Biosciences is currently generating about -0.03 per unit of volatility. If you would invest  3,989  in Shanghai OPM Biosciences on October 21, 2024 and sell it today you would lose (73.00) from holding Shanghai OPM Biosciences or give up 1.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Biwin Storage Technology  vs.  Shanghai OPM Biosciences

Biwin Storage Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biwin Storage Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Shanghai OPM Biosciences

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shanghai OPM Biosciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shanghai OPM sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biwin Storage and Shanghai OPM

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

The idea behind Biwin Storage Technology and Shanghai OPM Biosciences 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.