Correlation Between Tokyo Electron and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Tokyo Electron 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 Tokyo Electron and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyo Electron Limited and CSSC Offshore Marine, you can compare the effects of market volatilities on Tokyo Electron 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 Tokyo Electron with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyo Electron and CSSC Offshore.
Diversification Opportunities for Tokyo Electron and CSSC Offshore
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tokyo and CSSC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tokyo Electron Limited 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 Tokyo Electron 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 Tokyo Electron Limited 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 Tokyo Electron i.e., Tokyo Electron and CSSC Offshore go up and down completely randomly.
Pair Corralation between Tokyo Electron and CSSC Offshore
Assuming the 90 days horizon Tokyo Electron Limited is expected to generate 1.02 times more return on investment than CSSC Offshore. However, Tokyo Electron is 1.02 times more volatile than CSSC Offshore Marine. It trades about 0.12 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.19 per unit of risk. If you would invest 13,900 in Tokyo Electron Limited on September 1, 2024 and sell it today you would earn a total of 1,010 from holding Tokyo Electron Limited or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokyo Electron Limited vs. CSSC Offshore Marine
Performance |
| Timeline |
| Tokyo Electron |
| CSSC Offshore Marine |
Tokyo Electron and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokyo Electron and CSSC Offshore
The main advantage of trading using opposite Tokyo Electron and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyo Electron 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.| Tokyo Electron vs. Cleanaway Waste Management | Tokyo Electron vs. IMPERIAL TOBACCO | Tokyo Electron vs. JAPAN TOBACCO UNSPADR12 | Tokyo Electron vs. AIR PRODCHEMICALS |
| CSSC Offshore vs. Lion One Metals | CSSC Offshore vs. PARKEN Sport Entertainment | CSSC Offshore vs. POWER METALS | CSSC Offshore vs. Insurance Australia Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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