Correlation Between Spirent Communications and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Spirent Communications 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 Spirent Communications and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and CSSC Offshore Marine, you can compare the effects of market volatilities on Spirent Communications 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 Spirent Communications with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and CSSC Offshore.
Diversification Opportunities for Spirent Communications and CSSC Offshore
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Spirent and CSSC is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc 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 Spirent Communications 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 Spirent Communications plc 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 Spirent Communications i.e., Spirent Communications and CSSC Offshore go up and down completely randomly.
Pair Corralation between Spirent Communications and CSSC Offshore
Assuming the 90 days horizon Spirent Communications plc is expected to generate 0.33 times more return on investment than CSSC Offshore. However, Spirent Communications plc is 3.07 times less risky than CSSC Offshore. It trades about 0.19 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.12 per unit of risk. If you would invest 198.00 in Spirent Communications plc on September 2, 2024 and sell it today you would earn a total of 8.00 from holding Spirent Communications plc or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. CSSC Offshore Marine
Performance |
| Timeline |
| Spirent Communications |
| CSSC Offshore Marine |
Spirent Communications and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and CSSC Offshore
The main advantage of trading using opposite Spirent Communications and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications 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.| Spirent Communications vs. Deutsche Telekom AG | Spirent Communications vs. Superior Plus Corp | Spirent Communications vs. NMI Holdings | Spirent Communications vs. Origin Agritech |
| CSSC Offshore vs. Rogers Communications | CSSC Offshore vs. Computer And Technologies | CSSC Offshore vs. T MOBILE US | CSSC Offshore vs. Micron Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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