Correlation Between CSSC Offshore and NIPPON MEAT
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and NIPPON MEAT 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 NIPPON MEAT 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 NIPPON MEAT PACKERS, you can compare the effects of market volatilities on CSSC Offshore and NIPPON MEAT 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 NIPPON MEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and NIPPON MEAT.
Diversification Opportunities for CSSC Offshore and NIPPON MEAT
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSSC and NIPPON is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and NIPPON MEAT PACKERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIPPON MEAT PACKERS 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 NIPPON MEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIPPON MEAT PACKERS has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and NIPPON MEAT go up and down completely randomly.
Pair Corralation between CSSC Offshore and NIPPON MEAT
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 2.14 times more return on investment than NIPPON MEAT. However, CSSC Offshore is 2.14 times more volatile than NIPPON MEAT PACKERS. It trades about 0.04 of its potential returns per unit of risk. NIPPON MEAT PACKERS is currently generating about 0.04 per unit of risk. If you would invest 87.00 in CSSC Offshore Marine on August 30, 2024 and sell it today you would earn a total of 36.00 from holding CSSC Offshore Marine or generate 41.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. NIPPON MEAT PACKERS
Performance |
| Timeline |
| CSSC Offshore Marine |
| NIPPON MEAT PACKERS |
CSSC Offshore and NIPPON MEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and NIPPON MEAT
The main advantage of trading using opposite CSSC Offshore and NIPPON MEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, NIPPON MEAT 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 NIPPON MEAT will offset losses from the drop in NIPPON MEAT's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| NIPPON MEAT vs. Apple Inc | NIPPON MEAT vs. Apple Inc | NIPPON MEAT vs. Superior Plus Corp | NIPPON MEAT vs. SIVERS SEMICONDUCTORS AB |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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