Correlation Between CanSino Biologics and Borr Drilling

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

By analyzing existing cross correlation between CanSino Biologics and Borr Drilling, you can compare the effects of market volatilities on CanSino Biologics and Borr Drilling 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 CanSino Biologics with a short position of Borr Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanSino Biologics and Borr Drilling.

Diversification Opportunities for CanSino Biologics and Borr Drilling

-0.51

Correlation Coefficient

CanSino Biologics  Borr Drilling

Excellent diversification

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

Pair Corralation between CanSino Biologics and Borr Drilling

Assuming the 90 days horizon CanSino Biologics is expected to generate 1.69 times more return on investment than Borr Drilling. However, CanSino Biologics is 1.69 times more volatile than Borr Drilling. It trades about 0.08 of its potential returns per unit of risk. Borr Drilling is currently generating about -0.05 per unit of risk. If you would invest  210.00  in CanSino Biologics on October 12, 2024 and sell it today you would earn a total of  145.00  from holding CanSino Biologics or generate 69.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CanSino Biologics  vs.  Borr Drilling

CanSino Biologics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, CanSino Biologics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Borr Drilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Borr Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CanSino Biologics and Borr Drilling

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

The idea behind CanSino Biologics and Borr Drilling 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.