Correlation Between CSSC Offshore and NURAN WIRELESS
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and NURAN WIRELESS 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 CSSC Offshore and NURAN WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSSC Offshore Marine and NURAN WIRELESS INC, you can compare the effects of market volatilities on CSSC Offshore and NURAN WIRELESS 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 CSSC Offshore with a short position of NURAN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and NURAN WIRELESS.
Diversification Opportunities for CSSC Offshore and NURAN WIRELESS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSSC and NURAN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and NURAN WIRELESS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NURAN WIRELESS INC and CSSC Offshore 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 CSSC Offshore Marine are associated (or correlated) with NURAN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NURAN WIRELESS INC has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and NURAN WIRELESS go up and down completely randomly.
Pair Corralation between CSSC Offshore and NURAN WIRELESS
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.52 times more return on investment than NURAN WIRELESS. However, CSSC Offshore Marine is 1.91 times less risky than NURAN WIRELESS. It trades about -0.08 of its potential returns per unit of risk. NURAN WIRELESS INC is currently generating about -0.11 per unit of risk. If you would invest 128.00 in CSSC Offshore Marine on October 14, 2024 and sell it today you would lose (5.00) from holding CSSC Offshore Marine or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. NURAN WIRELESS INC
Performance |
| Timeline |
| CSSC Offshore Marine |
| NURAN WIRELESS INC |
CSSC Offshore and NURAN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and NURAN WIRELESS
The main advantage of trading using opposite CSSC Offshore and NURAN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, NURAN WIRELESS 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 NURAN WIRELESS will offset losses from the drop in NURAN WIRELESS's long position.| CSSC Offshore vs. CAREER EDUCATION | CSSC Offshore vs. EMBARK EDUCATION LTD | CSSC Offshore vs. STORE ELECTRONIC | CSSC Offshore vs. Benchmark Electronics |
| NURAN WIRELESS vs. CSSC Offshore Marine | NURAN WIRELESS vs. JLF INVESTMENT | NURAN WIRELESS vs. Gladstone Investment | NURAN WIRELESS vs. PT Wintermar Offshore |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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