Correlation Between ALD SA and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both ALD SA 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 ALD SA and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALD SA and CSSC Offshore Marine, you can compare the effects of market volatilities on ALD SA 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 ALD SA with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALD SA and CSSC Offshore.
Diversification Opportunities for ALD SA and CSSC Offshore
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALD and CSSC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ALD SA 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 ALD SA 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 ALD SA 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 ALD SA i.e., ALD SA and CSSC Offshore go up and down completely randomly.
Pair Corralation between ALD SA and CSSC Offshore
Assuming the 90 days horizon ALD SA is expected to under-perform the CSSC Offshore. In addition to that, ALD SA is 1.02 times more volatile than CSSC Offshore Marine. It trades about -0.21 of its total potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.18 per unit of volatility. If you would invest 141.00 in CSSC Offshore Marine on September 12, 2024 and sell it today you would lose (16.00) from holding CSSC Offshore Marine or give up 11.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALD SA vs. CSSC Offshore Marine
Performance |
| Timeline |
| ALD SA |
| CSSC Offshore Marine |
ALD SA and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALD SA and CSSC Offshore
The main advantage of trading using opposite ALD SA and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALD SA 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.| ALD SA vs. CSSC Offshore Marine | ALD SA vs. STMicroelectronics NV | ALD SA vs. STORE ELECTRONIC | ALD SA vs. Eidesvik Offshore ASA |
| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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