Correlation Between CanSino Biologics and AXWAY SOFTWARE

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

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

Diversification Opportunities for CanSino Biologics and AXWAY SOFTWARE

0.6

Correlation Coefficient

CanSino Biologics  AXWAY SOFTWARE

Poor diversification

The 3 months correlation between CanSino and AXWAY is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and AXWAY SOFTWARE EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXWAY SOFTWARE EO 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 AXWAY SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXWAY SOFTWARE EO has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and AXWAY SOFTWARE go up and down completely randomly.

Pair Corralation between CanSino Biologics and AXWAY SOFTWARE

Assuming the 90 days trading horizon CanSino Biologics is expected to under-perform the AXWAY SOFTWARE. In addition to that, CanSino Biologics is 1.95 times more volatile than AXWAY SOFTWARE EO. It trades about -0.02 of its total potential returns per unit of risk. AXWAY SOFTWARE EO is currently generating about 0.06 per unit of volatility. If you would invest  1,666  in AXWAY SOFTWARE EO on October 3, 2024 and sell it today you would earn a total of  1,004  from holding AXWAY SOFTWARE EO or generate 60.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CanSino Biologics  vs.  AXWAY SOFTWARE EO

CanSino Biologics

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CanSino Biologics unveiled solid returns over the last few months and may actually be approaching a breakup point.

AXWAY SOFTWARE EO

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXWAY SOFTWARE EO are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AXWAY SOFTWARE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CanSino Biologics and AXWAY SOFTWARE

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

The idea behind CanSino Biologics and AXWAY SOFTWARE EO 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.