Correlation Between CanSino Biologics and Nexera Energy

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

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

Diversification Opportunities for CanSino Biologics and Nexera Energy

0.16

Correlation Coefficient

CanSino Biologics  Nexera Energy

Average diversification

The 3 months correlation between CanSino and Nexera is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CanSino Biologics and Nexera Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexera Energy 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 Nexera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexera Energy has no effect on the direction of CanSino Biologics i.e., CanSino Biologics and Nexera Energy go up and down completely randomly.

Pair Corralation between CanSino Biologics and Nexera Energy

If you would invest  186.00  in CanSino Biologics on January 26, 2024 and sell it today you would earn a total of  24.00  from holding CanSino Biologics or generate 12.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CanSino Biologics  vs.  Nexera Energy

CanSino Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CanSino Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Nexera Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexera Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CanSino Biologics and Nexera Energy

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

The idea behind CanSino Biologics and Nexera Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.