Correlation Between CanSino Biologics and VIRG NATL

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

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

Diversification Opportunities for CanSino Biologics and VIRG NATL

0.53

Correlation Coefficient

CanSino Biologics  VIRG NATL

Very weak diversification

The 3 months correlation between CanSino and VIRG is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and VIRG NATL BANKSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRG NATL BANKSH 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 VIRG NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRG NATL BANKSH has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and VIRG NATL go up and down completely randomly.

Pair Corralation between CanSino Biologics and VIRG NATL

Assuming the 90 days trading horizon CanSino Biologics is expected to generate 1.42 times more return on investment than VIRG NATL. However, CanSino Biologics is 1.42 times more volatile than VIRG NATL BANKSH. It trades about 0.11 of its potential returns per unit of risk. VIRG NATL BANKSH is currently generating about 0.11 per unit of risk. If you would invest  228.00  in CanSino Biologics on September 27, 2024 and sell it today you would earn a total of  138.00  from holding CanSino Biologics or generate 60.53% return on investment over 90 days.

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

CanSino Biologics  vs.  VIRG NATL BANKSH

CanSino Biologics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 8 (%) 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.

VIRG NATL BANKSH

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIRG NATL BANKSH are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VIRG NATL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CanSino Biologics and VIRG NATL

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

The idea behind CanSino Biologics and VIRG NATL BANKSH 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.