Correlation Between CSSC Offshore and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising, you can compare the effects of market volatilities on CSSC Offshore and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Lamar Advertising.
Diversification Opportunities for CSSC Offshore and Lamar Advertising
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSSC and Lamar is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Lamar Advertising go up and down completely randomly.
Pair Corralation between CSSC Offshore and Lamar Advertising
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Lamar Advertising. In addition to that, CSSC Offshore is 3.22 times more volatile than Lamar Advertising. It trades about -0.18 of its total potential returns per unit of risk. Lamar Advertising is currently generating about 0.09 per unit of volatility. If you would invest 12,000 in Lamar Advertising on September 12, 2024 and sell it today you would earn a total of 200.00 from holding Lamar Advertising or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. Lamar Advertising
Performance |
| Timeline |
| CSSC Offshore Marine |
| Lamar Advertising |
CSSC Offshore and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Lamar Advertising
The main advantage of trading using opposite CSSC Offshore and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| Lamar Advertising vs. International Game Technology | Lamar Advertising vs. CyberArk Software | Lamar Advertising vs. QINGCI GAMES INC | Lamar Advertising vs. Guidewire Software |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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