Correlation Between INSURANCE AUST and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST 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 INSURANCE AUST and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and CSSC Offshore Marine, you can compare the effects of market volatilities on INSURANCE AUST 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 INSURANCE AUST with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and CSSC Offshore.
Diversification Opportunities for INSURANCE AUST and CSSC Offshore
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INSURANCE and CSSC is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP 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 INSURANCE AUST 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 INSURANCE AUST GRP 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 INSURANCE AUST i.e., INSURANCE AUST and CSSC Offshore go up and down completely randomly.
Pair Corralation between INSURANCE AUST and CSSC Offshore
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.48 times more return on investment than CSSC Offshore. However, INSURANCE AUST GRP is 2.07 times less risky than CSSC Offshore. It trades about 0.16 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.12 per unit of risk. If you would invest 444.00 in INSURANCE AUST GRP on August 30, 2024 and sell it today you would earn a total of 52.00 from holding INSURANCE AUST GRP or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. CSSC Offshore Marine
Performance |
| Timeline |
| INSURANCE AUST GRP |
| CSSC Offshore Marine |
INSURANCE AUST and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and CSSC Offshore
The main advantage of trading using opposite INSURANCE AUST and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST 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.| INSURANCE AUST vs. ScanSource | INSURANCE AUST vs. Canadian Utilities Limited | INSURANCE AUST vs. Selective Insurance Group | INSURANCE AUST vs. HANOVER INSURANCE |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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