Correlation Between DXC Technology and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both DXC Technology and CanSino Biologics 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 DXC Technology and CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and CanSino Biologics, you can compare the effects of market volatilities on DXC Technology and CanSino Biologics 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 DXC Technology with a short position of CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and CanSino Biologics.
Diversification Opportunities for DXC Technology and CanSino Biologics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DXC and CanSino is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics and DXC Technology 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 DXC Technology Co are associated (or correlated) with CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of DXC Technology i.e., DXC Technology and CanSino Biologics go up and down completely randomly.
Pair Corralation between DXC Technology and CanSino Biologics
Assuming the 90 days trading horizon DXC Technology is expected to generate 1.08 times less return on investment than CanSino Biologics. But when comparing it to its historical volatility, DXC Technology Co is 1.95 times less risky than CanSino Biologics. It trades about 0.23 of its potential returns per unit of risk. CanSino Biologics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 314.00 in CanSino Biologics on September 4, 2024 and sell it today you would earn a total of 44.00 from holding CanSino Biologics or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. CanSino Biologics
Performance |
| Timeline |
| DXC Technology |
| CanSino Biologics |
DXC Technology and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and CanSino Biologics
The main advantage of trading using opposite DXC Technology and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.| DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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