Correlation Between CSSC Offshore and CHIBA BANK
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK, you can compare the effects of market volatilities on CSSC Offshore and CHIBA BANK 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 CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and CHIBA BANK.
Diversification Opportunities for CSSC Offshore and CHIBA BANK
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSSC and CHIBA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK 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 CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and CHIBA BANK go up and down completely randomly.
Pair Corralation between CSSC Offshore and CHIBA BANK
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the CHIBA BANK. In addition to that, CSSC Offshore is 1.43 times more volatile than CHIBA BANK. It trades about -0.18 of its total potential returns per unit of risk. CHIBA BANK is currently generating about 0.12 per unit of volatility. If you would invest 755.00 in CHIBA BANK on September 12, 2024 and sell it today you would earn a total of 40.00 from holding CHIBA BANK or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CSSC Offshore Marine vs. CHIBA BANK
Performance |
| Timeline |
| CSSC Offshore Marine |
| CHIBA BANK |
CSSC Offshore and CHIBA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and CHIBA BANK
The main advantage of trading using opposite CSSC Offshore and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, CHIBA BANK 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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