Correlation Between 0010EPAF5 and CanSino Biologics

Can any of the company-specific risk be diversified away by investing in both 0010EPAF5 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 0010EPAF5 and CanSino Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEP TEX CENT and CanSino Biologics, you can compare the effects of market volatilities on 0010EPAF5 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 0010EPAF5 with a short position of CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0010EPAF5 and CanSino Biologics.

Diversification Opportunities for 0010EPAF5 and CanSino Biologics

0.23

Correlation Coefficient

0010EPAF5  CanSino Biologics

Modest diversification

The 3 months correlation between 0010EPAF5 and CanSino is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX CENT and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics and 0010EPAF5 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 AEP TEX CENT 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 0010EPAF5 i.e., 0010EPAF5 and CanSino Biologics go up and down completely randomly.

Pair Corralation between 0010EPAF5 and CanSino Biologics

Assuming the 90 days trading horizon AEP TEX CENT is expected to under-perform the CanSino Biologics. But the bond apears to be less risky and, when comparing its historical volatility, AEP TEX CENT is 4.38 times less risky than CanSino Biologics. The bond trades about -0.06 of its potential returns per unit of risk. The CanSino Biologics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  351.00  in CanSino Biologics on October 11, 2024 and sell it today you would earn a total of  4.00  from holding CanSino Biologics or generate 1.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.69%
Values	Daily Returns

AEP TEX CENT  vs.  CanSino Biologics

AEP TEX CENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEP TEX CENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 0010EPAF5 is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CanSino Biologics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, CanSino Biologics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with 0010EPAF5 and CanSino Biologics

The main advantage of trading using opposite 0010EPAF5 and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0010EPAF5 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 AEP TEX CENT 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.