Correlation Between Eurofins Scientific and CSPC Pharmaceutical

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

By analyzing existing cross correlation between Eurofins Scientific SE and CSPC Pharmaceutical Group, you can compare the effects of market volatilities on Eurofins Scientific and CSPC Pharmaceutical 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 Eurofins Scientific with a short position of CSPC Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurofins Scientific and CSPC Pharmaceutical.

Diversification Opportunities for Eurofins Scientific and CSPC Pharmaceutical

-0.05

Correlation Coefficient

Eurofins Scientific  CSPC Pharmaceutical

Good diversification

The 3 months correlation between Eurofins and CSPC is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Eurofins Scientific SE and CSPC Pharmaceutical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSPC Pharmaceutical and Eurofins Scientific 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 Eurofins Scientific SE are associated (or correlated) with CSPC Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSPC Pharmaceutical has no effect on the direction of Eurofins Scientific i.e., Eurofins Scientific and CSPC Pharmaceutical go up and down completely randomly.

Pair Corralation between Eurofins Scientific and CSPC Pharmaceutical

Assuming the 90 days horizon Eurofins Scientific SE is expected to under-perform the CSPC Pharmaceutical. In addition to that, Eurofins Scientific is 1.14 times more volatile than CSPC Pharmaceutical Group. It trades about -0.02 of its total potential returns per unit of risk. CSPC Pharmaceutical Group is currently generating about 0.23 per unit of volatility. If you would invest  105.00  in CSPC Pharmaceutical Group on July 31, 2025 and sell it today you would earn a total of  22.00  from holding CSPC Pharmaceutical Group or generate 20.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.56%
Values	Daily Returns

Eurofins Scientific SE  vs.  CSPC Pharmaceutical Group

Eurofins Scientific

Risk-Adjusted Performance

Weakest

Over the last 90 days Eurofins Scientific SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eurofins Scientific is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CSPC Pharmaceutical

Risk-Adjusted Performance

Solid

Over the last 90 days CSPC Pharmaceutical Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, CSPC Pharmaceutical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eurofins Scientific and CSPC Pharmaceutical

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

The idea behind Eurofins Scientific SE and CSPC Pharmaceutical Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.