Correlation Between Western Metal and Bloomage Biotechnology
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By analyzing existing cross correlation between Western Metal Materials and Bloomage Biotechnology Corp, you can compare the effects of market volatilities on Western Metal and Bloomage Biotechnology 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 Western Metal with a short position of Bloomage Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Metal and Bloomage Biotechnology.
Diversification Opportunities for Western Metal and Bloomage Biotechnology
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Bloomage is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Western Metal Materials and Bloomage Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomage Biotechnology and Western Metal 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 Western Metal Materials are associated (or correlated) with Bloomage Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomage Biotechnology has no effect on the direction of Western Metal i.e., Western Metal and Bloomage Biotechnology go up and down completely randomly.
Pair Corralation between Western Metal and Bloomage Biotechnology
Assuming the 90 days trading horizon Western Metal Materials is expected to generate 0.68 times more return on investment than Bloomage Biotechnology. However, Western Metal Materials is 1.47 times less risky than Bloomage Biotechnology. It trades about 0.17 of its potential returns per unit of risk. Bloomage Biotechnology Corp is currently generating about 0.06 per unit of risk. If you would invest 1,296 in Western Metal Materials on September 24, 2024 and sell it today you would earn a total of 455.00 from holding Western Metal Materials or generate 35.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Metal Materials vs. Bloomage Biotechnology Corp
Performance |
Timeline |
Western Metal Materials |
Bloomage Biotechnology |
Western Metal and Bloomage Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Metal and Bloomage Biotechnology
The main advantage of trading using opposite Western Metal and Bloomage Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Metal position performs unexpectedly, Bloomage Biotechnology 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 Bloomage Biotechnology will offset losses from the drop in Bloomage Biotechnology's long position.Western Metal vs. Zijin Mining Group | Western Metal vs. Wanhua Chemical Group | Western Metal vs. Baoshan Iron Steel | Western Metal vs. Shandong Gold Mining |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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