Correlation Between BIOPHARMA CREDIT and China Overseas

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

By analyzing existing cross correlation between BIOPHARMA CREDIT DL and China Overseas Land, you can compare the effects of market volatilities on BIOPHARMA CREDIT and China Overseas 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 BIOPHARMA CREDIT with a short position of China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIOPHARMA CREDIT and China Overseas.

Diversification Opportunities for BIOPHARMA CREDIT and China Overseas

-0.19

Correlation Coefficient

BIOPHARMA CREDIT  China Overseas

Good diversification

The 3 months correlation between BIOPHARMA and China is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BIOPHARMA CREDIT DL and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land and BIOPHARMA CREDIT 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 BIOPHARMA CREDIT DL are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of BIOPHARMA CREDIT i.e., BIOPHARMA CREDIT and China Overseas go up and down completely randomly.

Pair Corralation between BIOPHARMA CREDIT and China Overseas

Assuming the 90 days horizon BIOPHARMA CREDIT DL is expected to generate 0.43 times more return on investment than China Overseas. However, BIOPHARMA CREDIT DL is 2.35 times less risky than China Overseas. It trades about 0.05 of its potential returns per unit of risk. China Overseas Land is currently generating about 0.0 per unit of risk. If you would invest  76.00  in BIOPHARMA CREDIT DL on September 8, 2025 and sell it today you would earn a total of  3.00  from holding BIOPHARMA CREDIT DL or generate 3.95% return on investment over 90 days.

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

BIOPHARMA CREDIT DL  vs.  China Overseas Land

BIOPHARMA CREDIT

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in BIOPHARMA CREDIT DL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BIOPHARMA CREDIT is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

China Overseas Land

Risk-Adjusted Performance

Weakest

Over the last 90 days China Overseas Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, China Overseas is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BIOPHARMA CREDIT and China Overseas

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

The idea behind BIOPHARMA CREDIT DL and China Overseas Land 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.