Correlation Between CSSC Offshore and Kering SA
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on CSSC Offshore and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Kering SA.
Diversification Opportunities for CSSC Offshore and Kering SA
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSSC and Kering is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Kering SA go up and down completely randomly.
Pair Corralation between CSSC Offshore and Kering SA
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Kering SA. In addition to that, CSSC Offshore is 1.05 times more volatile than Kering SA. It trades about -0.09 of its total potential returns per unit of risk. Kering SA is currently generating about -0.06 per unit of volatility. If you would invest 25,455 in Kering SA on September 3, 2024 and sell it today you would lose (3,440) from holding Kering SA or give up 13.51% 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. Kering SA
Performance |
| Timeline |
| CSSC Offshore Marine |
| Kering SA |
CSSC Offshore and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Kering SA
The main advantage of trading using opposite CSSC Offshore and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| CSSC Offshore vs. SBA Communications Corp | CSSC Offshore vs. FIREWEED METALS P | CSSC Offshore vs. Jacquet Metal Service | CSSC Offshore vs. Shenandoah Telecommunications |
| Kering SA vs. Goosehead Insurance | Kering SA vs. CSSC Offshore Marine | Kering SA vs. LIFENET INSURANCE CO | Kering SA vs. BW OFFSHORE LTD |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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