Correlation Between CSSC Offshore and New HopeLimited
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and New HopeLimited 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 New HopeLimited 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 New Hope, you can compare the effects of market volatilities on CSSC Offshore and New HopeLimited 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 New HopeLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and New HopeLimited.
Diversification Opportunities for CSSC Offshore and New HopeLimited
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CSSC and New is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and New Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New HopeLimited 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 New HopeLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New HopeLimited has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and New HopeLimited go up and down completely randomly.
Pair Corralation between CSSC Offshore and New HopeLimited
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the New HopeLimited. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 1.01 times less risky than New HopeLimited. The stock trades about -0.11 of its potential returns per unit of risk. The New Hope is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 291.00 in New Hope on September 5, 2024 and sell it today you would lose (2.00) from holding New Hope or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. New Hope
Performance |
| Timeline |
| CSSC Offshore Marine |
| New HopeLimited |
CSSC Offshore and New HopeLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and New HopeLimited
The main advantage of trading using opposite CSSC Offshore and New HopeLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, New HopeLimited 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 New HopeLimited will offset losses from the drop in New HopeLimited's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| New HopeLimited vs. Astral Foods Limited | New HopeLimited vs. Autohome ADR | New HopeLimited vs. CSSC Offshore Marine | New HopeLimited vs. DFS Furniture PLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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