Correlation Between CSSC Offshore and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and BW OFFSHORE 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 BW OFFSHORE 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 BW OFFSHORE LTD, you can compare the effects of market volatilities on CSSC Offshore and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and BW OFFSHORE.
Diversification Opportunities for CSSC Offshore and BW OFFSHORE
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between CSSC and XY81 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and BW OFFSHORE go up and down completely randomly.
Pair Corralation between CSSC Offshore and BW OFFSHORE
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 1.28 times more return on investment than BW OFFSHORE. However, CSSC Offshore is 1.28 times more volatile than BW OFFSHORE LTD. It trades about 0.04 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.03 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. BW OFFSHORE LTD
Performance |
| Timeline |
| CSSC Offshore Marine |
| BW OFFSHORE LTD |
CSSC Offshore and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and BW OFFSHORE
The main advantage of trading using opposite CSSC Offshore and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
| BW OFFSHORE vs. NOV Inc | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. NMI Holdings | BW OFFSHORE 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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