Correlation Between CanSino Biologics and MARVELL

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

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

Diversification Opportunities for CanSino Biologics and MARVELL

0.35

Correlation Coefficient

CanSino Biologics  MARVELL

Weak diversification

The 3 months correlation between CanSino and MARVELL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and MARVELL TECHNOLOGY GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARVELL TECHNOLOGY 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 MARVELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARVELL TECHNOLOGY has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and MARVELL go up and down completely randomly.

Pair Corralation between CanSino Biologics and MARVELL

Assuming the 90 days horizon CanSino Biologics is expected to generate 2.31 times more return on investment than MARVELL. However, CanSino Biologics is 2.31 times more volatile than MARVELL TECHNOLOGY GROUP. It trades about 0.07 of its potential returns per unit of risk. MARVELL TECHNOLOGY GROUP is currently generating about -0.3 per unit of risk. If you would invest  351.00  in CanSino Biologics on October 9, 2024 and sell it today you would earn a total of  37.00  from holding CanSino Biologics or generate 10.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.87%
Values	Daily Returns

CanSino Biologics  vs.  MARVELL TECHNOLOGY GROUP

CanSino Biologics

Risk-Adjusted Performance

5 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, CanSino Biologics reported solid returns over the last few months and may actually be approaching a breakup point.

MARVELL TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARVELL TECHNOLOGY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for MARVELL TECHNOLOGY GROUP investors.

Pair Trading with CanSino Biologics and MARVELL

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

The idea behind CanSino Biologics and MARVELL TECHNOLOGY GROUP 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.