Correlation Between BW OFFSHORE and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both BW OFFSHORE 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 BW OFFSHORE and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW OFFSHORE LTD and CSSC Offshore Marine, you can compare the effects of market volatilities on BW OFFSHORE 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 BW OFFSHORE with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW OFFSHORE and CSSC Offshore.
Diversification Opportunities for BW OFFSHORE and CSSC Offshore
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between XY81 and CSSC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BW OFFSHORE LTD 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 BW 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 BW OFFSHORE LTD 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 BW OFFSHORE i.e., BW OFFSHORE and CSSC Offshore go up and down completely randomly.
Pair Corralation between BW OFFSHORE and CSSC Offshore
Assuming the 90 days trading horizon BW OFFSHORE is expected to generate 1.39 times less return on investment than CSSC Offshore. But when comparing it to its historical volatility, BW OFFSHORE LTD is 1.28 times less risky than CSSC Offshore. It trades about 0.03 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW OFFSHORE LTD vs. CSSC Offshore Marine
Performance |
| Timeline |
| BW OFFSHORE LTD |
| CSSC Offshore Marine |
BW OFFSHORE and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW OFFSHORE and CSSC Offshore
The main advantage of trading using opposite BW OFFSHORE and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW OFFSHORE 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.| BW OFFSHORE vs. NOV Inc | BW OFFSHORE vs. Superior Plus Corp | BW OFFSHORE vs. NMI Holdings | BW OFFSHORE 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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