Correlation Between CSSC Offshore and Microsoft
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on CSSC Offshore and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Microsoft.
Diversification Opportunities for CSSC Offshore and Microsoft
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSSC and Microsoft is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Microsoft go up and down completely randomly.
Pair Corralation between CSSC Offshore and Microsoft
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 2.31 times more return on investment than Microsoft. However, CSSC Offshore is 2.31 times more volatile than Microsoft. It trades about 0.02 of its potential returns per unit of risk. Microsoft is currently generating about 0.04 per unit of risk. If you would invest 115.00 in CSSC Offshore Marine on October 29, 2024 and sell it today you would earn a total of 7.00 from holding CSSC Offshore Marine or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. Microsoft
Performance |
| Timeline |
| CSSC Offshore Marine |
| Microsoft |
CSSC Offshore and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Microsoft
The main advantage of trading using opposite CSSC Offshore and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| CSSC Offshore vs. PLAYSTUDIOS A DL 0001 | CSSC Offshore vs. Gaming and Leisure | CSSC Offshore vs. Hua Hong Semiconductor | CSSC Offshore vs. Playtech plc |
| Microsoft vs. SCANDMEDICAL SOLDK 040 | Microsoft vs. ONWARD MEDICAL BV | Microsoft vs. PEPTONIC MEDICAL | Microsoft 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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