Correlation Between Ono Pharmaceutical and CSPC Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Ono Pharmaceutical and CSPC Pharmaceutical 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 Ono Pharmaceutical and CSPC Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ono Pharmaceutical Co and CSPC Pharmaceutical Group, you can compare the effects of market volatilities on Ono Pharmaceutical and CSPC Pharmaceutical 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 Ono Pharmaceutical with a short position of CSPC Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ono Pharmaceutical and CSPC Pharmaceutical.
Diversification Opportunities for Ono Pharmaceutical and CSPC Pharmaceutical
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ono and CSPC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ono Pharmaceutical Co and CSPC Pharmaceutical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSPC Pharmaceutical and Ono Pharmaceutical 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 Ono Pharmaceutical Co are associated (or correlated) with CSPC Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSPC Pharmaceutical has no effect on the direction of Ono Pharmaceutical i.e., Ono Pharmaceutical and CSPC Pharmaceutical go up and down completely randomly.
Pair Corralation between Ono Pharmaceutical and CSPC Pharmaceutical
Assuming the 90 days horizon Ono Pharmaceutical Co is expected to under-perform the CSPC Pharmaceutical. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ono Pharmaceutical Co is 5.4 times less risky than CSPC Pharmaceutical. The pink sheet trades about -0.21 of its potential returns per unit of risk. The CSPC Pharmaceutical Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 62.00 in CSPC Pharmaceutical Group on August 30, 2024 and sell it today you would earn a total of 5.00 from holding CSPC Pharmaceutical Group or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ono Pharmaceutical Co vs. CSPC Pharmaceutical Group
Performance |
| Timeline |
| Ono Pharmaceutical |
| CSPC Pharmaceutical |
Ono Pharmaceutical and CSPC Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ono Pharmaceutical and CSPC Pharmaceutical
The main advantage of trading using opposite Ono Pharmaceutical and CSPC Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ono Pharmaceutical position performs unexpectedly, CSPC Pharmaceutical 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 CSPC Pharmaceutical will offset losses from the drop in CSPC Pharmaceutical's long position.| Ono Pharmaceutical vs. Santen Pharmaceutical Co | Ono Pharmaceutical vs. GSK plc | Ono Pharmaceutical vs. Grifols SA ADR | Ono Pharmaceutical vs. Pfizer Inc |
| CSPC Pharmaceutical vs. Ono Pharmaceutical Co | CSPC Pharmaceutical vs. Grifols SA ADR | CSPC Pharmaceutical vs. Pfizer Inc | CSPC Pharmaceutical vs. Northann Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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