Correlation Between CVW CLEANTECH and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Lion Biotechnologies 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 CVW CLEANTECH and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and Lion Biotechnologies, you can compare the effects of market volatilities on CVW CLEANTECH and Lion Biotechnologies 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 CVW CLEANTECH with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Lion Biotechnologies.
Diversification Opportunities for CVW CLEANTECH and Lion Biotechnologies
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between CVW and Lion is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and CVW CLEANTECH 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 CVW CLEANTECH INC are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Lion Biotechnologies
Assuming the 90 days trading horizon CVW CLEANTECH is expected to generate 1.2 times less return on investment than Lion Biotechnologies. But when comparing it to its historical volatility, CVW CLEANTECH INC is 1.4 times less risky than Lion Biotechnologies. It trades about 0.06 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 502.00 in Lion Biotechnologies on August 24, 2024 and sell it today you would earn a total of 261.00 from holding Lion Biotechnologies or generate 51.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Lion Biotechnologies
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Lion Biotechnologies |
CVW CLEANTECH and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Lion Biotechnologies
The main advantage of trading using opposite CVW CLEANTECH and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| CVW CLEANTECH vs. Alfa Financial Software | CVW CLEANTECH vs. MAGIC SOFTWARE ENTR | CVW CLEANTECH vs. FORMPIPE SOFTWARE AB | CVW CLEANTECH vs. COVIVIO HOTELS INH |
| Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |