Correlation Between CSSC Offshore and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Electronic Arts 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 Electronic Arts 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 Electronic Arts, you can compare the effects of market volatilities on CSSC Offshore and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Electronic Arts.
Diversification Opportunities for CSSC Offshore and Electronic Arts
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSSC and Electronic is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Electronic Arts go up and down completely randomly.
Pair Corralation between CSSC Offshore and Electronic Arts
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Electronic Arts. In addition to that, CSSC Offshore is 2.56 times more volatile than Electronic Arts. It trades about -0.26 of its total potential returns per unit of risk. Electronic Arts is currently generating about 0.69 per unit of volatility. If you would invest 13,326 in Electronic Arts on August 29, 2024 and sell it today you would earn a total of 2,444 from holding Electronic Arts or generate 18.34% 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. Electronic Arts
Performance |
| Timeline |
| CSSC Offshore Marine |
| Electronic Arts |
CSSC Offshore and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Electronic Arts
The main advantage of trading using opposite CSSC Offshore and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| Electronic Arts vs. MI Homes | Electronic Arts vs. Geratherm Medical AG | Electronic Arts vs. ONWARD MEDICAL BV | Electronic Arts vs. Advanced Medical Solutions |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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