Correlation Between CanSino Biologics and BRAEMAR HOTELS

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

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

Diversification Opportunities for CanSino Biologics and BRAEMAR HOTELS

0.61

Correlation Coefficient

CanSino Biologics  BRAEMAR HOTELS

Poor diversification

The 3 months correlation between CanSino and BRAEMAR is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and BRAEMAR HOTELS go up and down completely randomly.

Pair Corralation between CanSino Biologics and BRAEMAR HOTELS

Assuming the 90 days trading horizon CanSino Biologics is expected to generate 0.82 times more return on investment than BRAEMAR HOTELS. However, CanSino Biologics is 1.22 times less risky than BRAEMAR HOTELS. It trades about -0.15 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.2 per unit of risk. If you would invest  408.00  in CanSino Biologics on October 10, 2024 and sell it today you would lose (30.00) from holding CanSino Biologics or give up 7.35% of portfolio value over 90 days.

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

CanSino Biologics  vs.  BRAEMAR HOTELS RES

CanSino Biologics

Risk-Adjusted Performance

7 of 100

OK

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 unsteady basic indicators, CanSino Biologics unveiled solid returns over the last few months and may actually be approaching a breakup point.

BRAEMAR HOTELS RES

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BRAEMAR HOTELS RES are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BRAEMAR HOTELS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CanSino Biologics and BRAEMAR HOTELS

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

The idea behind CanSino Biologics and BRAEMAR HOTELS RES 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.