Correlation Between Global Ship and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Global Ship and CSSC Offshore 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 Global Ship and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and CSSC Offshore Marine, you can compare the effects of market volatilities on Global Ship and CSSC Offshore 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 Global Ship with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and CSSC Offshore.
Diversification Opportunities for Global Ship and CSSC Offshore
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and CSSC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine and Global Ship 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 Global Ship Lease are associated (or correlated) with CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Global Ship i.e., Global Ship and CSSC Offshore go up and down completely randomly.
Pair Corralation between Global Ship and CSSC Offshore
Assuming the 90 days horizon Global Ship is expected to generate 1.41 times less return on investment than CSSC Offshore. But when comparing it to its historical volatility, Global Ship Lease is 1.67 times less risky than CSSC Offshore. It trades about 0.05 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 82.00 in CSSC Offshore Marine on September 3, 2024 and sell it today you would earn a total of 42.00 from holding CSSC Offshore Marine or generate 51.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. CSSC Offshore Marine
Performance |
| Timeline |
| Global Ship Lease |
| CSSC Offshore Marine |
Global Ship and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and CSSC Offshore
The main advantage of trading using opposite Global Ship and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| Global Ship vs. BW LPG Limited | Global Ship vs. Wilh Wilhelmsen Holding | Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings |
| CSSC Offshore vs. SBA Communications Corp | CSSC Offshore vs. FIREWEED METALS P | CSSC Offshore vs. Jacquet Metal Service | CSSC Offshore vs. Shenandoah Telecommunications |
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 the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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