Correlation Between CHIBA BANK and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both CHIBA BANK 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 CHIBA BANK and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHIBA BANK and CSSC Offshore Marine, you can compare the effects of market volatilities on CHIBA BANK 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 CHIBA BANK with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHIBA BANK and CSSC Offshore.
Diversification Opportunities for CHIBA BANK and CSSC Offshore
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHIBA and CSSC is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK i.e., CHIBA BANK and CSSC Offshore go up and down completely randomly.
Pair Corralation between CHIBA BANK and CSSC Offshore
Assuming the 90 days trading horizon CHIBA BANK is expected to generate 1.33 times less return on investment than CSSC Offshore. But when comparing it to its historical volatility, CHIBA BANK is 1.35 times less risky than CSSC Offshore. It trades about 0.04 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 83.00 in CSSC Offshore Marine on September 5, 2024 and sell it today you would earn a total of 42.00 from holding CSSC Offshore Marine or generate 50.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHIBA BANK vs. CSSC Offshore Marine
Performance |
| Timeline |
| CHIBA BANK |
| CSSC Offshore Marine |
CHIBA BANK and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHIBA BANK and CSSC Offshore
The main advantage of trading using opposite CHIBA BANK and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHIBA BANK 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.| CHIBA BANK vs. TOTAL GABON | CHIBA BANK vs. Walgreens Boots Alliance | CHIBA BANK vs. Peak Resources Limited |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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