Correlation Between CSSC Offshore and MTI WIRELESS
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and MTI WIRELESS 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 MTI WIRELESS 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 MTI WIRELESS EDGE, you can compare the effects of market volatilities on CSSC Offshore and MTI WIRELESS 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 MTI WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and MTI WIRELESS.
Diversification Opportunities for CSSC Offshore and MTI WIRELESS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CSSC and MTI is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and MTI WIRELESS EDGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI WIRELESS EDGE 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 MTI WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI WIRELESS EDGE has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and MTI WIRELESS go up and down completely randomly.
Pair Corralation between CSSC Offshore and MTI WIRELESS
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the MTI WIRELESS. In addition to that, CSSC Offshore is 1.04 times more volatile than MTI WIRELESS EDGE. It trades about -0.07 of its total potential returns per unit of risk. MTI WIRELESS EDGE is currently generating about 0.05 per unit of volatility. If you would invest 43.00 in MTI WIRELESS EDGE on August 31, 2024 and sell it today you would earn a total of 3.00 from holding MTI WIRELESS EDGE or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. MTI WIRELESS EDGE
Performance |
| Timeline |
| CSSC Offshore Marine |
| MTI WIRELESS EDGE |
CSSC Offshore and MTI WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and MTI WIRELESS
The main advantage of trading using opposite CSSC Offshore and MTI WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, MTI WIRELESS 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 MTI WIRELESS will offset losses from the drop in MTI WIRELESS's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS vs. Apple Inc | MTI WIRELESS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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