Correlation Between CSSC Offshore and AP Møller
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and AP Møller 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 AP Møller 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 AP Mller , you can compare the effects of market volatilities on CSSC Offshore and AP Møller 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 AP Møller. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and AP Møller.
Diversification Opportunities for CSSC Offshore and AP Møller
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSSC and DP4B is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Møller 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 AP Møller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Møller has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and AP Møller go up and down completely randomly.
Pair Corralation between CSSC Offshore and AP Møller
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the AP Møller. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 1.5 times less risky than AP Møller. The stock trades about -0.3 of its potential returns per unit of risk. The AP Mller is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 154,450 in AP Mller on October 20, 2024 and sell it today you would lose (10,000) from holding AP Mller or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. AP Mller
Performance |
| Timeline |
| CSSC Offshore Marine |
| AP Møller |
CSSC Offshore and AP Møller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and AP Møller
The main advantage of trading using opposite CSSC Offshore and AP Møller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, AP Møller 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 AP Møller will offset losses from the drop in AP Møller's long position.| CSSC Offshore vs. Stag Industrial | CSSC Offshore vs. Ubisoft Entertainment SA | CSSC Offshore vs. GREENX METALS LTD | CSSC Offshore vs. ARDAGH METAL PACDL 0001 |
| AP Møller vs. HAPAG LLOYD UNSPADR 12 | AP Møller vs. ZIM Integrated Shipping | AP Møller vs. DFDS AS | AP Møller vs. Pacific Basin Shipping |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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