Correlation Between CanSino Biologics and Petro River

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

By analyzing existing cross correlation between CanSino Biologics and Petro River Oil, you can compare the effects of market volatilities on CanSino Biologics and Petro River 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 Petro River. Check out your portfolio center. Please also check ongoing floating volatility patterns of CanSino Biologics and Petro River.

Diversification Opportunities for CanSino Biologics and Petro River

0.0

Correlation Coefficient

CanSino Biologics  Petro River

Pay attention - limited upside

The 3 months correlation between CanSino and Petro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Petro River Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro River Oil 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 Petro River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro River Oil has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Petro River go up and down completely randomly.

Pair Corralation between CanSino Biologics and Petro River

If you would invest  0.00  in Petro River Oil on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Petro River Oil or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CanSino Biologics  vs.  Petro River Oil

CanSino Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CanSino Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Petro River Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petro River Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Petro River is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CanSino Biologics and Petro River

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

The idea behind CanSino Biologics and Petro River Oil 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.