Correlation Between CSL and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both CSL and WUXI 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 CSL and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL LTD SPONADR and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on CSL and WUXI 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 CSL with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and WUXI BIOLOGICS.
Diversification Opportunities for CSL and WUXI BIOLOGICS
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CSL and WUXI is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CSL LTD SPONADR and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 and CSL 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 CSL LTD SPONADR are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of CSL i.e., CSL and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between CSL and WUXI BIOLOGICS
Assuming the 90 days trading horizon CSL LTD SPONADR is expected to under-perform the WUXI BIOLOGICS. But the stock apears to be less risky and, when comparing its historical volatility, CSL LTD SPONADR is 3.1 times less risky than WUXI BIOLOGICS. The stock trades about -0.11 of its potential returns per unit of risk. The WUXI BIOLOGICS UNSPADR2 is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 338.00 in WUXI BIOLOGICS UNSPADR2 on September 23, 2024 and sell it today you would earn a total of 80.00 from holding WUXI BIOLOGICS UNSPADR2 or generate 23.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL LTD SPONADR vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| CSL LTD SPONADR |
| WUXI BIOLOGICS UNSPADR2 |
CSL and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and WUXI BIOLOGICS
The main advantage of trading using opposite CSL and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, WUXI 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| CSL vs. LIFEWAY FOODS | CSL vs. National Beverage Corp | CSL vs. Thai Beverage Public | CSL vs. National Retail Properties |
| WUXI BIOLOGICS vs. COFCO Joycome Foods | WUXI BIOLOGICS vs. LIFEWAY FOODS | WUXI BIOLOGICS vs. INTER CARS SA | WUXI BIOLOGICS vs. Cal Maine Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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