Correlation Between WUXI BIOLOGICS and CSL
Can any of the company-specific risk be diversified away by investing in both WUXI BIOLOGICS and CSL 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 WUXI BIOLOGICS and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WUXI BIOLOGICS UNSPADR2 and CSL Limited, you can compare the effects of market volatilities on WUXI BIOLOGICS and CSL 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 WUXI BIOLOGICS with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of WUXI BIOLOGICS and CSL.
Diversification Opportunities for WUXI BIOLOGICS and CSL
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between WUXI and CSL is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding WUXI BIOLOGICS UNSPADR2 and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and WUXI BIOLOGICS 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 WUXI BIOLOGICS UNSPADR2 are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of WUXI BIOLOGICS i.e., WUXI BIOLOGICS and CSL go up and down completely randomly.
Pair Corralation between WUXI BIOLOGICS and CSL
Assuming the 90 days trading horizon WUXI BIOLOGICS UNSPADR2 is expected to generate 3.29 times more return on investment than CSL. However, WUXI BIOLOGICS is 3.29 times more volatile than CSL Limited. It trades about 0.25 of its potential returns per unit of risk. CSL Limited is currently generating about -0.09 per unit of risk. If you would invest 338.00 in WUXI BIOLOGICS UNSPADR2 on September 23, 2024 and sell it today you would earn a total of 80.00 from holding WUXI BIOLOGICS UNSPADR2 or generate 23.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WUXI BIOLOGICS UNSPADR2 vs. CSL Limited
Performance |
| Timeline |
| WUXI BIOLOGICS UNSPADR2 |
| CSL Limited |
WUXI BIOLOGICS and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WUXI BIOLOGICS and CSL
The main advantage of trading using opposite WUXI BIOLOGICS and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WUXI BIOLOGICS position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| WUXI BIOLOGICS vs. COFCO Joycome Foods | WUXI BIOLOGICS vs. LIFEWAY FOODS | WUXI BIOLOGICS vs. INTER CARS SA | WUXI BIOLOGICS vs. Cal Maine Foods |
| CSL vs. Novo Nordisk AS | CSL vs. CSL LTD SPONADR | CSL vs. Mercedes Benz Group AG | CSL vs. Vertex Pharmaceuticals Incorporated |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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