Correlation Between CSSC Offshore and Carsales
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on CSSC Offshore and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Carsales.
Diversification Opportunities for CSSC Offshore and Carsales
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CSSC and Carsales is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Carsales go up and down completely randomly.
Pair Corralation between CSSC Offshore and Carsales
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Carsales. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 2.52 times less risky than Carsales. The stock trades about -0.29 of its potential returns per unit of risk. The CarsalesCom is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,220 in CarsalesCom on November 7, 2024 and sell it today you would earn a total of 200.00 from holding CarsalesCom or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
CSSC Offshore Marine vs. CarsalesCom
Performance |
| Timeline |
| CSSC Offshore Marine |
| CarsalesCom |
CSSC Offshore and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Carsales
The main advantage of trading using opposite CSSC Offshore and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| CSSC Offshore vs. HAVERTY FURNITURE A | CSSC Offshore vs. ULTRA CLEAN HLDGS | CSSC Offshore vs. KENEDIX OFFICE INV | CSSC Offshore vs. Siamgas And Petrochemicals |
| Carsales vs. CITY OFFICE REIT | Carsales vs. NTG Nordic Transport | Carsales vs. SCIENCE IN SPORT | Carsales vs. TITANIUM TRANSPORTGROUP |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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