Correlation Between DFS Furniture and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and CSSC Offshore Marine, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and CSSC Offshore.
Diversification Opportunities for DFS Furniture and CSSC Offshore
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFS and CSSC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture 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 DFS Furniture 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 DFS Furniture 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 DFS Furniture i.e., DFS Furniture and CSSC Offshore go up and down completely randomly.
Pair Corralation between DFS Furniture and CSSC Offshore
Assuming the 90 days trading horizon DFS Furniture is expected to generate 3.47 times less return on investment than CSSC Offshore. But when comparing it to its historical volatility, DFS Furniture PLC is 1.13 times less risky than CSSC Offshore. It trades about 0.01 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 90.00 in CSSC Offshore Marine on October 16, 2024 and sell it today you would earn a total of 31.00 from holding CSSC Offshore Marine or generate 34.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. CSSC Offshore Marine
Performance |
| Timeline |
| DFS Furniture PLC |
| CSSC Offshore Marine |
DFS Furniture and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and CSSC Offshore
The main advantage of trading using opposite DFS Furniture and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Pebblebrook Hotel Trust | DFS Furniture vs. InterContinental Hotels Group | DFS Furniture vs. Sims Metal Management | DFS Furniture vs. Waste Management |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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