Correlation Between CSSC Offshore and SANOK RUBBER

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

Diversification Opportunities for CSSC Offshore and SANOK RUBBER

0.06

Correlation Coefficient

CSSC Offshore  SANOK RUBBER

Significant diversification

The 3 months correlation between CSSC and SANOK is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and SANOK RUBBER go up and down completely randomly.

Pair Corralation between CSSC Offshore and SANOK RUBBER

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the SANOK RUBBER. In addition to that, CSSC Offshore is 1.76 times more volatile than SANOK RUBBER ZY. It trades about -0.12 of its total potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.23 per unit of volatility. If you would invest  445.00  in SANOK RUBBER ZY on October 8, 2024 and sell it today you would earn a total of  62.00  from holding SANOK RUBBER ZY or generate 13.93% 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.  SANOK RUBBER ZY

CSSC Offshore Marine

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SANOK RUBBER ZY

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and SANOK RUBBER

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

The idea behind CSSC Offshore Marine and SANOK RUBBER ZY 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.