Correlation Between Guangzhou Baiyunshan and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both Guangzhou Baiyunshan and CanSino 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 Guangzhou Baiyunshan and CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangzhou Baiyunshan Pharmaceutical and CanSino Biologics, you can compare the effects of market volatilities on Guangzhou Baiyunshan and CanSino 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 Guangzhou Baiyunshan with a short position of CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Baiyunshan and CanSino Biologics.
Diversification Opportunities for Guangzhou Baiyunshan and CanSino Biologics
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangzhou and CanSino is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Baiyunshan Pharmaceu and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics and Guangzhou Baiyunshan 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 Guangzhou Baiyunshan Pharmaceutical are associated (or correlated) with CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of Guangzhou Baiyunshan i.e., Guangzhou Baiyunshan and CanSino Biologics go up and down completely randomly.
Pair Corralation between Guangzhou Baiyunshan and CanSino Biologics
Assuming the 90 days horizon Guangzhou Baiyunshan Pharmaceutical is expected to generate 0.37 times more return on investment than CanSino Biologics. However, Guangzhou Baiyunshan Pharmaceutical is 2.73 times less risky than CanSino Biologics. It trades about -0.17 of its potential returns per unit of risk. CanSino Biologics is currently generating about -0.23 per unit of risk. If you would invest 210.00 in Guangzhou Baiyunshan Pharmaceutical on October 15, 2024 and sell it today you would lose (6.00) from holding Guangzhou Baiyunshan Pharmaceutical or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Baiyunshan Pharmaceu vs. CanSino Biologics
Performance |
| Timeline |
| Guangzhou Baiyunshan |
| CanSino Biologics |
Guangzhou Baiyunshan and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Baiyunshan and CanSino Biologics
The main advantage of trading using opposite Guangzhou Baiyunshan and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Baiyunshan position performs unexpectedly, CanSino 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.| Guangzhou Baiyunshan vs. Superior Plus Corp | Guangzhou Baiyunshan vs. NMI Holdings | Guangzhou Baiyunshan vs. SIVERS SEMICONDUCTORS AB | Guangzhou Baiyunshan vs. Talanx AG |
| CanSino Biologics vs. NEWELL RUBBERMAID | CanSino Biologics vs. Martin Marietta Materials | CanSino Biologics vs. Telecom Argentina SA | CanSino Biologics vs. Compagnie Plastic Omnium |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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