Correlation Between CSSC Offshore and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on CSSC Offshore and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and DATANG INTL.
Diversification Opportunities for CSSC Offshore and DATANG INTL
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CSSC and DATANG is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and DATANG INTL go up and down completely randomly.
Pair Corralation between CSSC Offshore and DATANG INTL
If you would invest 16.00 in DATANG INTL POW on November 21, 2024 and sell it today you would earn a total of 1.00 from holding DATANG INTL POW or generate 6.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CSSC Offshore Marine vs. DATANG INTL POW
Performance |
Timeline |
CSSC Offshore Marine |
DATANG INTL POW |
CSSC Offshore and DATANG INTL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CSSC Offshore and DATANG INTL
The main advantage of trading using opposite CSSC Offshore and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.CSSC Offshore vs. Fevertree Drinks PLC | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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