Correlation Between CSSC Offshore and Option Care
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Option Care 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 Option Care 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 Option Care Health, you can compare the effects of market volatilities on CSSC Offshore and Option Care 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 Option Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Option Care.
Diversification Opportunities for CSSC Offshore and Option Care
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSSC and Option is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Option Care Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Option Care Health 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 Option Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Option Care Health has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Option Care go up and down completely randomly.
Pair Corralation between CSSC Offshore and Option Care
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.94 times more return on investment than Option Care. However, CSSC Offshore Marine is 1.07 times less risky than Option Care. It trades about -0.08 of its potential returns per unit of risk. Option Care Health is currently generating about -0.12 per unit of risk. If you would invest 151.00 in CSSC Offshore Marine on September 12, 2024 and sell it today you would lose (26.00) from holding CSSC Offshore Marine or give up 17.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. Option Care Health
Performance |
| Timeline |
| CSSC Offshore Marine |
| Option Care Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CSSC Offshore and Option Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Option Care
The main advantage of trading using opposite CSSC Offshore and Option Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Option Care 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 Option Care will offset losses from the drop in Option Care's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| Option Care vs. Diamyd Medical AB | Option Care vs. ETFS Coffee ETC | Option Care vs. SAFETY MEDICAL PROD | Option Care vs. Japan Medical Dynamic |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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