Correlation Between CAIRN HOMES and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES 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 CAIRN HOMES and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and CSSC Offshore Marine, you can compare the effects of market volatilities on CAIRN HOMES 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 CAIRN HOMES with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and CSSC Offshore.
Diversification Opportunities for CAIRN HOMES and CSSC Offshore
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAIRN and CSSC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO 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 CAIRN HOMES 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 CAIRN HOMES EO 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 CAIRN HOMES i.e., CAIRN HOMES and CSSC Offshore go up and down completely randomly.
Pair Corralation between CAIRN HOMES and CSSC Offshore
Assuming the 90 days horizon CAIRN HOMES EO is expected to generate 0.74 times more return on investment than CSSC Offshore. However, CAIRN HOMES EO is 1.36 times less risky than CSSC Offshore. It trades about 0.1 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.04 per unit of risk. If you would invest 85.00 in CAIRN HOMES EO on October 16, 2024 and sell it today you would earn a total of 140.00 from holding CAIRN HOMES EO or generate 164.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. CSSC Offshore Marine
Performance |
| Timeline |
| CAIRN HOMES EO |
| CSSC Offshore Marine |
CAIRN HOMES and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and CSSC Offshore
The main advantage of trading using opposite CAIRN HOMES and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES 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.| CAIRN HOMES vs. QINGCI GAMES INC | CAIRN HOMES vs. Harmony Gold Mining | CAIRN HOMES vs. GigaMedia | CAIRN HOMES vs. Calibre Mining Corp |
| CSSC Offshore vs. DFS Furniture PLC | CSSC Offshore vs. STMicroelectronics NV | CSSC Offshore vs. Meiko Electronics Co | CSSC Offshore vs. CAIRN HOMES EO |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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