Correlation Between CanSino Biologics and Vulcan Materials
Can any of the company-specific risk be diversified away by investing in both CanSino Biologics and Vulcan Materials 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 CanSino Biologics and Vulcan Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CanSino Biologics and Vulcan Materials, you can compare the effects of market volatilities on CanSino Biologics and Vulcan Materials 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 CanSino Biologics with a short position of Vulcan Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanSino Biologics and Vulcan Materials.
Diversification Opportunities for CanSino Biologics and Vulcan Materials
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CanSino and Vulcan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Vulcan Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Materials and CanSino 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 CanSino Biologics are associated (or correlated) with Vulcan Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Materials has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Vulcan Materials go up and down completely randomly.
Pair Corralation between CanSino Biologics and Vulcan Materials
Assuming the 90 days horizon CanSino Biologics is expected to under-perform the Vulcan Materials. In addition to that, CanSino Biologics is 1.68 times more volatile than Vulcan Materials. It trades about -0.31 of its total potential returns per unit of risk. Vulcan Materials is currently generating about 0.26 per unit of volatility. If you would invest 25,713 in Vulcan Materials on November 4, 2024 and sell it today you would earn a total of 1,702 from holding Vulcan Materials or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CanSino Biologics vs. Vulcan Materials
Performance |
| Timeline |
| CanSino Biologics |
| Vulcan Materials |
CanSino Biologics and Vulcan Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CanSino Biologics and Vulcan Materials
The main advantage of trading using opposite CanSino Biologics and Vulcan Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CanSino Biologics position performs unexpectedly, Vulcan Materials 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 Vulcan Materials will offset losses from the drop in Vulcan Materials' long position.| CanSino Biologics vs. Canopy Growth Corp | CanSino Biologics vs. Aurora Cannabis | CanSino Biologics vs. SNDL Inc | CanSino Biologics vs. Cronos Group |
| Vulcan Materials vs. Eagle Materials | Vulcan Materials vs. CRH PLC ADR | Vulcan Materials vs. Summit Materials | Vulcan Materials vs. Cemex SAB de |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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