Correlation Between CSSC Offshore and AVIC Fund

Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and AVIC Fund 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 CSSC Offshore and AVIC Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSSC Offshore Marine and AVIC Fund Management, you can compare the effects of market volatilities on CSSC Offshore and AVIC Fund 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 CSSC Offshore with a short position of AVIC Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and AVIC Fund.

Diversification Opportunities for CSSC Offshore and AVIC Fund

-0.29

Correlation Coefficient

CSSC Offshore  AVIC Fund

Very good diversification

The 3 months correlation between CSSC and AVIC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and AVIC Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIC Fund Management and CSSC 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 CSSC Offshore Marine are associated (or correlated) with AVIC Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIC Fund Management has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and AVIC Fund go up and down completely randomly.

Pair Corralation between CSSC Offshore and AVIC Fund

Assuming the 90 days trading horizon CSSC Offshore is expected to generate 65.05 times less return on investment than AVIC Fund. In addition to that, CSSC Offshore is 1.32 times more volatile than AVIC Fund Management. It trades about 0.0 of its total potential returns per unit of risk. AVIC Fund Management is currently generating about 0.25 per unit of volatility. If you would invest  1,050  in AVIC Fund Management on December 22, 2024 and sell it today you would earn a total of  154.00  from holding AVIC Fund Management or generate 14.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CSSC Offshore Marine  vs.  AVIC Fund Management

CSSC Offshore Marine

Risk-Adjusted Performance

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 somewhat strong basic indicators, CSSC Offshore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AVIC Fund Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AVIC Fund Management are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AVIC Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and AVIC Fund

The main advantage of trading using opposite CSSC Offshore and AVIC Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, AVIC Fund 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 AVIC Fund will offset losses from the drop in AVIC Fund's long position.

The idea behind CSSC Offshore Marine and AVIC Fund Management 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.