Correlation Between NIPPON MEAT and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both NIPPON MEAT and CSSC 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 NIPPON MEAT and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIPPON MEAT PACKERS and CSSC Offshore Marine, you can compare the effects of market volatilities on NIPPON MEAT and CSSC 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 NIPPON MEAT with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIPPON MEAT and CSSC Offshore.
Diversification Opportunities for NIPPON MEAT and CSSC Offshore
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NIPPON and CSSC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NIPPON MEAT PACKERS and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine and NIPPON MEAT 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 NIPPON MEAT PACKERS are associated (or correlated) with CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of NIPPON MEAT i.e., NIPPON MEAT and CSSC Offshore go up and down completely randomly.
Pair Corralation between NIPPON MEAT and CSSC Offshore
Assuming the 90 days trading horizon NIPPON MEAT is expected to generate 2.02 times less return on investment than CSSC Offshore. But when comparing it to its historical volatility, NIPPON MEAT PACKERS is 2.14 times less risky than CSSC Offshore. It trades about 0.04 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 |
NIPPON MEAT PACKERS vs. CSSC Offshore Marine
Performance |
| Timeline |
| NIPPON MEAT PACKERS |
| CSSC Offshore Marine |
NIPPON MEAT and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIPPON MEAT and CSSC Offshore
The main advantage of trading using opposite NIPPON MEAT and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIPPON MEAT position performs unexpectedly, CSSC 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| NIPPON MEAT vs. Apple Inc | NIPPON MEAT vs. Apple Inc | NIPPON MEAT vs. Superior Plus Corp | NIPPON MEAT vs. SIVERS SEMICONDUCTORS AB |
| CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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