Correlation Between CSSC Offshore and CPU SOFTWAREHOUSE
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE, you can compare the effects of market volatilities on CSSC Offshore and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and CPU SOFTWAREHOUSE.
Diversification Opportunities for CSSC Offshore and CPU SOFTWAREHOUSE
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CSSC and CPU is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and CPU SOFTWAREHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPU SOFTWAREHOUSE has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and CPU SOFTWAREHOUSE go up and down completely randomly.
Pair Corralation between CSSC Offshore and CPU SOFTWAREHOUSE
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the CPU SOFTWAREHOUSE. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 1.3 times less risky than CPU SOFTWAREHOUSE. The stock trades about -0.06 of its potential returns per unit of risk. The CPU SOFTWAREHOUSE is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 142.00 in CPU SOFTWAREHOUSE on September 1, 2024 and sell it today you would lose (46.00) from holding CPU SOFTWAREHOUSE or give up 32.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. CPU SOFTWAREHOUSE
Performance |
| Timeline |
| CSSC Offshore Marine |
| CPU SOFTWAREHOUSE |
CSSC Offshore and CPU SOFTWAREHOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and CPU SOFTWAREHOUSE
The main advantage of trading using opposite CSSC Offshore and CPU SOFTWAREHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE will offset losses from the drop in CPU SOFTWAREHOUSE's long position.| CSSC Offshore vs. Lion One Metals | CSSC Offshore vs. PARKEN Sport Entertainment | CSSC Offshore vs. POWER METALS | CSSC Offshore vs. Insurance Australia Group |
| CPU SOFTWAREHOUSE vs. Fukuyama Transporting Co | CPU SOFTWAREHOUSE vs. Scandinavian Tobacco Group | CPU SOFTWAREHOUSE vs. BOS BETTER ONLINE | CPU SOFTWAREHOUSE vs. Gold Road Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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