Correlation Between CSSC Offshore and Qi An

Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Qi An 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 Qi An 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 Qi An Xin, you can compare the effects of market volatilities on CSSC Offshore and Qi An 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 Qi An. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Qi An.

Diversification Opportunities for CSSC Offshore and Qi An

0.18

Correlation Coefficient

CSSC Offshore  Qi An

Average diversification

The 3 months correlation between CSSC and 688561 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Qi An Xin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qi An Xin 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 Qi An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qi An Xin has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Qi An go up and down completely randomly.

Pair Corralation between CSSC Offshore and Qi An

Assuming the 90 days trading horizon CSSC Offshore is expected to generate 69.54 times less return on investment than Qi An. But when comparing it to its historical volatility, CSSC Offshore Marine is 3.32 times less risky than Qi An. It trades about 0.0 of its potential returns per unit of risk. Qi An Xin is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,868  in Qi An Xin on December 26, 2024 and sell it today you would earn a total of  582.00  from holding Qi An Xin or generate 20.29% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  Qi An Xin

CSSC Offshore Marine

Risk-Adjusted Performance

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.

Qi An Xin

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Qi An Xin are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Qi An sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and Qi An

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

The idea behind CSSC Offshore Marine and Qi An Xin 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.