Correlation Between CanSino Biologics and Hawkins

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

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

Diversification Opportunities for CanSino Biologics and Hawkins

-0.02

Correlation Coefficient

CanSino Biologics  Hawkins

Good diversification

The 3 months correlation between CanSino and Hawkins is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Hawkins go up and down completely randomly.

Pair Corralation between CanSino Biologics and Hawkins

Assuming the 90 days horizon CanSino Biologics is expected to under-perform the Hawkins. In addition to that, CanSino Biologics is 1.74 times more volatile than Hawkins. It trades about -0.07 of its total potential returns per unit of risk. Hawkins is currently generating about 0.1 per unit of volatility. If you would invest  6,136  in Hawkins on February 5, 2024 and sell it today you would earn a total of  1,524  from holding Hawkins or generate 24.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

CanSino Biologics  vs.  Hawkins

CanSino Biologics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CanSino Biologics are ranked lower than 2 (%) 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.

Hawkins

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward-looking signals, Hawkins displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CanSino Biologics and Hawkins

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

The idea behind CanSino Biologics and Hawkins 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.