Correlation Between Cardano and SINOPHARM GROUP

Can any of the company-specific risk be diversified away by investing in both Cardano and SINOPHARM GROUP 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 Cardano and SINOPHARM GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cardano and SINOPHARM GROUP 15ON, you can compare the effects of market volatilities on Cardano and SINOPHARM GROUP 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 Cardano with a short position of SINOPHARM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and SINOPHARM GROUP.

Diversification Opportunities for Cardano and SINOPHARM GROUP

0.51

Correlation Coefficient

Cardano  SINOPHARM GROUP

Very weak diversification

The 3 months correlation between Cardano and SINOPHARM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and SINOPHARM GROUP 15ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPHARM GROUP 15ON and Cardano 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 Cardano are associated (or correlated) with SINOPHARM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINOPHARM GROUP 15ON has no effect on the direction of Cardano i.e., Cardano and SINOPHARM GROUP go up and down completely randomly.

Pair Corralation between Cardano and SINOPHARM GROUP

Assuming the 90 days trading horizon Cardano is expected to under-perform the SINOPHARM GROUP. In addition to that, Cardano is 4.12 times more volatile than SINOPHARM GROUP 15ON. It trades about -0.07 of its total potential returns per unit of risk. SINOPHARM GROUP 15ON is currently generating about -0.08 per unit of volatility. If you would invest  1,280  in SINOPHARM GROUP 15ON on October 11, 2024 and sell it today you would lose (30.00) from holding SINOPHARM GROUP 15ON or give up 2.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	80.95%
Values	Daily Returns

Cardano  vs.  SINOPHARM GROUP 15ON

Cardano

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

SINOPHARM GROUP 15ON

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SINOPHARM GROUP 15ON are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SINOPHARM GROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cardano and SINOPHARM GROUP

The main advantage of trading using opposite Cardano and SINOPHARM GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, SINOPHARM GROUP 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 SINOPHARM GROUP will offset losses from the drop in SINOPHARM GROUP's long position.

The idea behind Cardano and SINOPHARM GROUP 15ON pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.