Correlation Between CanSino Biologics and Evonik Industries
Can any of the company-specific risk be diversified away by investing in both CanSino Biologics and Evonik Industries 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 Evonik Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CanSino Biologics and Evonik Industries AG, you can compare the effects of market volatilities on CanSino Biologics and Evonik Industries 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 Evonik Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanSino Biologics and Evonik Industries.
Diversification Opportunities for CanSino Biologics and Evonik Industries
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CanSino and Evonik is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Evonik Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evonik Industries 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 Evonik Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evonik Industries has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Evonik Industries go up and down completely randomly.
Pair Corralation between CanSino Biologics and Evonik Industries
Assuming the 90 days trading horizon CanSino Biologics is expected to under-perform the Evonik Industries. In addition to that, CanSino Biologics is 2.68 times more volatile than Evonik Industries AG. It trades about -0.05 of its total potential returns per unit of risk. Evonik Industries AG is currently generating about 0.29 per unit of volatility. If you would invest 1,647 in Evonik Industries AG on October 23, 2024 and sell it today you would earn a total of 121.00 from holding Evonik Industries AG or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
CanSino Biologics vs. Evonik Industries AG
Performance |
| Timeline |
| CanSino Biologics |
| Evonik Industries |
CanSino Biologics and Evonik Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CanSino Biologics and Evonik Industries
The main advantage of trading using opposite CanSino Biologics and Evonik Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CanSino Biologics position performs unexpectedly, Evonik Industries 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 Evonik Industries will offset losses from the drop in Evonik Industries' long position.| CanSino Biologics vs. Tyson Foods | CanSino Biologics vs. SLR Investment Corp | CanSino Biologics vs. United Natural Foods | CanSino Biologics vs. Cal Maine Foods |
| Evonik Industries vs. Linde plc | Evonik Industries vs. Linde PLC | Evonik Industries vs. Air Liquide SA | Evonik Industries vs. Ecolab Inc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |