Correlation Between CSSC Offshore and Hyatt Hotels

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

Diversification Opportunities for CSSC Offshore and Hyatt Hotels

0.33

Correlation Coefficient

CSSC Offshore  Hyatt Hotels

Weak diversification

The 3 months correlation between CSSC and Hyatt is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels 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 Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Hyatt Hotels go up and down completely randomly.

Pair Corralation between CSSC Offshore and Hyatt Hotels

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.39 times more return on investment than Hyatt Hotels. However, CSSC Offshore Marine is 2.53 times less risky than Hyatt Hotels. It trades about -0.19 of its potential returns per unit of risk. Hyatt Hotels is currently generating about -0.22 per unit of risk. If you would invest  135.00  in CSSC Offshore Marine on December 21, 2024 and sell it today you would lose (13.00) from holding CSSC Offshore Marine or give up 9.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

CSSC Offshore Marine  vs.  Hyatt Hotels

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. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hyatt Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyatt Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CSSC Offshore and Hyatt Hotels

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

The idea behind CSSC Offshore Marine and Hyatt Hotels 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.