Correlation Between CanSino Biologics and Pfizer

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

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

Diversification Opportunities for CanSino Biologics and Pfizer

-0.55

Correlation Coefficient

CanSino Biologics  Pfizer

Excellent diversification

The 3 months correlation between CanSino and Pfizer is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Pfizer go up and down completely randomly.

Pair Corralation between CanSino Biologics and Pfizer

Assuming the 90 days trading horizon CanSino Biologics is expected to generate 3.24 times more return on investment than Pfizer. However, CanSino Biologics is 3.24 times more volatile than Pfizer Inc. It trades about 0.09 of its potential returns per unit of risk. Pfizer Inc is currently generating about -0.05 per unit of risk. If you would invest  366.00  in CanSino Biologics on December 21, 2024 and sell it today you would earn a total of  66.00  from holding CanSino Biologics or generate 18.03% 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.  Pfizer Inc

CanSino Biologics

Risk-Adjusted Performance

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

Pfizer Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pfizer Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Pfizer is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CanSino Biologics and Pfizer

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

The idea behind CanSino Biologics and Pfizer Inc 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.