Correlation Between Fiberhome Telecommunicatio and CSSC Offshore

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Can any of the company-specific risk be diversified away by investing in both Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and CSSC Offshore Marine, you can compare the effects of market volatilities on Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and CSSC Offshore.

Diversification Opportunities for Fiberhome Telecommunicatio and CSSC Offshore

FiberhomeCSSCDiversified AwayFiberhomeCSSCDiversified Away100%
0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Fiberhome and CSSC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te 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 Fiberhome Telecommunicatio 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 Fiberhome Telecommunication Technologies 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 Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and CSSC Offshore go up and down completely randomly.

Pair Corralation between Fiberhome Telecommunicatio and CSSC Offshore

Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.73 times more return on investment than CSSC Offshore. However, Fiberhome Telecommunicatio is 1.73 times more volatile than CSSC Offshore Marine. It trades about 0.07 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.11 per unit of risk. If you would invest  1,824  in Fiberhome Telecommunication Technologies on October 28, 2024 and sell it today you would earn a total of  176.00  from holding Fiberhome Telecommunication Technologies or generate 9.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Fiberhome Telecommunication Te  vs.  CSSC Offshore Marine

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-5051015
JavaScript chart by amCharts 3.21.15600498 600685
       Timeline  
Fiberhome Telecommunicatio 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Fiberhome Telecommunication Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fiberhome Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1717.51818.51919.52020.52121.5
CSSC Offshore Marine 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CSSC Offshore Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2324252627

Fiberhome Telecommunicatio and CSSC Offshore Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.62-6.46-4.29-2.13-0.03612.164.46.638.8711.11 0.050.100.15
JavaScript chart by amCharts 3.21.15600498 600685
       Returns  

Pair Trading with Fiberhome Telecommunicatio and CSSC Offshore

The main advantage of trading using opposite Fiberhome Telecommunicatio and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio 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.
The idea behind Fiberhome Telecommunication Technologies and CSSC Offshore Marine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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