Correlation Between China Dongsheng and BioAffinity Technologies

Can any of the company-specific risk be diversified away by investing in both China Dongsheng and BioAffinity Technologies 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 Dongsheng and BioAffinity Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Dongsheng International and bioAffinity Technologies Warrant, you can compare the effects of market volatilities on China Dongsheng and BioAffinity Technologies 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 Dongsheng with a short position of BioAffinity Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Dongsheng and BioAffinity Technologies.

Diversification Opportunities for China Dongsheng and BioAffinity Technologies

-0.14

Correlation Coefficient

China Dongsheng  BioAffinity Technologies

Good diversification

The 3 months correlation between China and BioAffinity is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding China Dongsheng International and bioAffinity Technologies Warra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAffinity Technologies and China Dongsheng 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 Dongsheng International are associated (or correlated) with BioAffinity Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAffinity Technologies has no effect on the direction of China Dongsheng i.e., China Dongsheng and BioAffinity Technologies go up and down completely randomly.

Pair Corralation between China Dongsheng and BioAffinity Technologies

Given the investment horizon of 90 days China Dongsheng International is expected to generate 1.31 times more return on investment than BioAffinity Technologies. However, China Dongsheng is 1.31 times more volatile than bioAffinity Technologies Warrant. It trades about 0.15 of its potential returns per unit of risk. bioAffinity Technologies Warrant is currently generating about 0.05 per unit of risk. If you would invest  0.13  in China Dongsheng International on December 30, 2024 and sell it today you would earn a total of  0.20  from holding China Dongsheng International or generate 153.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.6%
Values	Daily Returns

China Dongsheng International  vs.  bioAffinity Technologies Warra

China Dongsheng Inte

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Dongsheng International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, China Dongsheng reported solid returns over the last few months and may actually be approaching a breakup point.

BioAffinity Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in bioAffinity Technologies Warrant are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, BioAffinity Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Dongsheng and BioAffinity Technologies

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

The idea behind China Dongsheng International and bioAffinity Technologies Warrant 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.