Correlation Between CanSino Biologics and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both CanSino Biologics and Lululemon Athletica 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 Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CanSino Biologics and Lululemon Athletica, you can compare the effects of market volatilities on CanSino Biologics and Lululemon Athletica 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 Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanSino Biologics and Lululemon Athletica.
Diversification Opportunities for CanSino Biologics and Lululemon Athletica
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CanSino and Lululemon is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica 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 Lululemon Athletica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lululemon Athletica has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Lululemon Athletica go up and down completely randomly.
Pair Corralation between CanSino Biologics and Lululemon Athletica
Assuming the 90 days trading horizon CanSino Biologics is expected to generate 2.02 times more return on investment than Lululemon Athletica. However, CanSino Biologics is 2.02 times more volatile than Lululemon Athletica. It trades about 0.2 of its potential returns per unit of risk. Lululemon Athletica is currently generating about -0.34 per unit of risk. If you would invest 362.00 in CanSino Biologics on December 8, 2024 and sell it today you would earn a total of 80.00 from holding CanSino Biologics or generate 22.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CanSino Biologics vs. Lululemon Athletica
Performance |
| Timeline |
| CanSino Biologics |
| Lululemon Athletica |
CanSino Biologics and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CanSino Biologics and Lululemon Athletica
The main advantage of trading using opposite CanSino Biologics and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CanSino Biologics position performs unexpectedly, Lululemon Athletica 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 Lululemon Athletica will offset losses from the drop in Lululemon Athletica's long position.| CanSino Biologics vs. ITALIAN WINE BRANDS | ||
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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