Correlation Between CanSino Biologics and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both CanSino Biologics and Electronic Arts 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 Electronic Arts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CanSino Biologics and Electronic Arts, you can compare the effects of market volatilities on CanSino Biologics and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanSino Biologics and Electronic Arts.
Diversification Opportunities for CanSino Biologics and Electronic Arts
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CanSino and Electronic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Electronic Arts go up and down completely randomly.
Pair Corralation between CanSino Biologics and Electronic Arts
Assuming the 90 days trading horizon CanSino Biologics is expected to generate 4.3 times more return on investment than Electronic Arts. However, CanSino Biologics is 4.3 times more volatile than Electronic Arts. It trades about -0.11 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.54 per unit of risk. If you would invest 376.00 in CanSino Biologics on October 17, 2024 and sell it today you would lose (28.00) from holding CanSino Biologics or give up 7.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CanSino Biologics vs. Electronic Arts
Performance |
| Timeline |
| CanSino Biologics |
| Electronic Arts |
CanSino Biologics and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CanSino Biologics and Electronic Arts
The main advantage of trading using opposite CanSino Biologics and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CanSino Biologics position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| CanSino Biologics vs. ASURE SOFTWARE | CanSino Biologics vs. Diamyd Medical AB | CanSino Biologics vs. CompuGroup Medical SE | CanSino Biologics vs. SPECTRAL MEDICAL |
| Electronic Arts vs. CanSino Biologics | Electronic Arts vs. Pure Storage | Electronic Arts vs. SCANSOURCE | Electronic Arts vs. BOSTON BEER A |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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