Correlation Between Cansino Biologics and COSCO SHIPPING

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

Diversification Opportunities for Cansino Biologics and COSCO SHIPPING

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Cansino and COSCO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cansino Biologics and COSCO SHIPPING HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING HOLDINGS 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING HOLDINGS has no effect on the direction of Cansino Biologics i.e., Cansino Biologics and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between Cansino Biologics and COSCO SHIPPING

Assuming the 90 days horizon Cansino Biologics is expected to under-perform the COSCO SHIPPING. In addition to that, Cansino Biologics is 1.02 times more volatile than COSCO SHIPPING HOLDINGS. It trades about -0.03 of its total potential returns per unit of risk. COSCO SHIPPING HOLDINGS is currently generating about 0.1 per unit of volatility. If you would invest  400.00  in COSCO SHIPPING HOLDINGS on May 17, 2022 and sell it today you would earn a total of  977.00  from holding COSCO SHIPPING HOLDINGS or generate 244.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy77.36%
ValuesDaily Returns

Cansino Biologics  vs.  COSCO SHIPPING HOLDINGS

 Performance (%) 
       Timeline  
Cansino Biologics 
Cansino Performance
0 of 100
Over the last 90 days Cansino Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Cansino Price Channel

COSCO SHIPPING HOLDINGS 
COSCO Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING HOLDINGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, COSCO SHIPPING is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

COSCO Price Channel

Cansino Biologics and COSCO SHIPPING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cansino Biologics and COSCO SHIPPING

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

Cansino Biologics

Pair trading matchups for Cansino Biologics

The idea behind Cansino Biologics and COSCO SHIPPING HOLDINGS 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.

COSCO SHIPPING HOLDINGS

Pair trading matchups for COSCO SHIPPING

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against COSCO SHIPPING as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. COSCO SHIPPING's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, COSCO SHIPPING's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to COSCO SHIPPING HOLDINGS.
Check out your portfolio center. 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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