Correlation Between CanSino Biologics and AYR WELLNESS

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

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

Diversification Opportunities for CanSino Biologics and AYR WELLNESS

-0.57

Correlation Coefficient

CanSino Biologics  AYR WELLNESS

Excellent diversification

The 3 months correlation between CanSino and AYR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and AYR WELLNESS INCRESVTG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR WELLNESS INCRESVTG 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 AYR WELLNESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR WELLNESS INCRESVTG has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and AYR WELLNESS go up and down completely randomly.

Pair Corralation between CanSino Biologics and AYR WELLNESS

Assuming the 90 days horizon CanSino Biologics is expected to generate 0.45 times more return on investment than AYR WELLNESS. However, CanSino Biologics is 2.24 times less risky than AYR WELLNESS. It trades about 0.09 of its potential returns per unit of risk. AYR WELLNESS INCRESVTG is currently generating about -0.16 per unit of risk. If you would invest  364.00  in CanSino Biologics on December 21, 2024 and sell it today you would earn a total of  58.00  from holding CanSino Biologics or generate 15.93% 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.  AYR WELLNESS INCRESVTG

CanSino Biologics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CanSino Biologics reported solid returns over the last few months and may actually be approaching a breakup point.

AYR WELLNESS INCRESVTG

Risk-Adjusted Performance

Very Weak

Over the last 90 days AYR WELLNESS INCRESVTG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CanSino Biologics and AYR WELLNESS

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

The idea behind CanSino Biologics and AYR WELLNESS INCRESVTG 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.