Correlation Between Arrow Electronics and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics 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 Arrow Electronics and CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and CanSino Biologics, you can compare the effects of market volatilities on Arrow Electronics 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 Arrow Electronics with a short position of CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and CanSino Biologics.
Diversification Opportunities for Arrow Electronics and CanSino Biologics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and CanSino is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics i.e., Arrow Electronics and CanSino Biologics go up and down completely randomly.
Pair Corralation between Arrow Electronics and CanSino Biologics
Assuming the 90 days horizon Arrow Electronics is expected to generate 0.34 times more return on investment than CanSino Biologics. However, Arrow Electronics is 2.94 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 -0.19 per unit of risk. If you would invest 10,800 in Arrow Electronics on October 30, 2024 and sell it today you would earn a total of 500.00 from holding Arrow Electronics or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. CanSino Biologics
Performance |
| Timeline |
| Arrow Electronics |
| CanSino Biologics |
Arrow Electronics and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and CanSino Biologics
The main advantage of trading using opposite Arrow Electronics and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics 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.| Arrow Electronics vs. DICKER DATA LTD | Arrow Electronics vs. Esprinet SpA | Arrow Electronics vs. Wayside Technology Group | Arrow Electronics vs. FORTEC Elektronik AG |
| CanSino Biologics vs. Verizon Communications | CanSino Biologics vs. The Boston Beer | CanSino Biologics vs. National Beverage Corp | CanSino Biologics vs. Fevertree Drinks PLC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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