Correlation Between LIVZON PHARMAC and CanSino Biologics

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Can any of the company-specific risk be diversified away by investing in both LIVZON PHARMAC and CanSino Biologics 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 LIVZON PHARMAC and CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIVZON PHARMAC GRP and CanSino Biologics, you can compare the effects of market volatilities on LIVZON PHARMAC and CanSino Biologics 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 LIVZON PHARMAC with a short position of CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIVZON PHARMAC and CanSino Biologics.

Diversification Opportunities for LIVZON PHARMAC and CanSino Biologics

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between LIVZON and CanSino is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding LIVZON PHARMAC GRP and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics and LIVZON PHARMAC 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 LIVZON PHARMAC GRP are associated (or correlated) with CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of LIVZON PHARMAC i.e., LIVZON PHARMAC and CanSino Biologics go up and down completely randomly.

Pair Corralation between LIVZON PHARMAC and CanSino Biologics

Assuming the 90 days horizon LIVZON PHARMAC GRP is expected to generate 0.62 times more return on investment than CanSino Biologics. However, LIVZON PHARMAC GRP is 1.62 times less risky than CanSino Biologics. It trades about -0.05 of its potential returns per unit of risk. CanSino Biologics is currently generating about -0.21 per unit of risk. If you would invest  314.00  in LIVZON PHARMAC GRP on October 15, 2024 and sell it today you would lose (6.00) from holding LIVZON PHARMAC GRP or give up 1.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

LIVZON PHARMAC GRP  vs.  CanSino Biologics

 Performance 
       Timeline  
LIVZON PHARMAC GRP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LIVZON PHARMAC GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LIVZON PHARMAC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
CanSino Biologics 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
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. 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.

LIVZON PHARMAC and CanSino Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LIVZON PHARMAC and CanSino Biologics

The main advantage of trading using opposite LIVZON PHARMAC and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIVZON PHARMAC position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.
The idea behind LIVZON PHARMAC GRP and CanSino Biologics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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