Correlation Between Gap and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Gap 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 Gap and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gap and CSSC Offshore Marine, you can compare the effects of market volatilities on Gap 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 Gap with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gap and CSSC Offshore.
Diversification Opportunities for Gap and CSSC Offshore
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gap and CSSC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Gap 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 Gap 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 The Gap 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 Gap i.e., Gap and CSSC Offshore go up and down completely randomly.
Pair Corralation between Gap and CSSC Offshore
Assuming the 90 days trading horizon The Gap is expected to generate 1.27 times more return on investment than CSSC Offshore. However, Gap is 1.27 times more volatile than CSSC Offshore Marine. It trades about -0.01 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.38 per unit of risk. If you would invest 2,262 in The Gap on October 23, 2024 and sell it today you would lose (12.00) from holding The Gap or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gap vs. CSSC Offshore Marine
Performance |
| Timeline |
| Gap |
| CSSC Offshore Marine |
Gap and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gap and CSSC Offshore
The main advantage of trading using opposite Gap and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap 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.| Gap vs. CSSC Offshore Marine | Gap vs. AIR PRODCHEMICALS | Gap vs. BlueScope Steel Limited | Gap vs. EIDESVIK OFFSHORE NK |
| CSSC Offshore vs. CITIC Telecom International | CSSC Offshore vs. OPKO HEALTH | CSSC Offshore vs. TELECOM ITALIA | CSSC Offshore vs. China Communications Services |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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