Correlation Between CSSC Offshore and Hutchison Telecommunicatio

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

Diversification Opportunities for CSSC Offshore and Hutchison Telecommunicatio

0.06

Correlation Coefficient

CSSC Offshore  Hutchison Telecommunicatio

Significant diversification

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

Pair Corralation between CSSC Offshore and Hutchison Telecommunicatio

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Hutchison Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 3.07 times less risky than Hutchison Telecommunicatio. The stock trades about -0.03 of its potential returns per unit of risk. The Hutchison Telecommunications Hong is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4.66  in Hutchison Telecommunications Hong on October 9, 2024 and sell it today you would earn a total of  5.34  from holding Hutchison Telecommunications Hong or generate 114.59% 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.  Hutchison Telecommunications H

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.

Hutchison Telecommunicatio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hutchison Telecommunications Hong are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hutchison Telecommunicatio reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and Hutchison Telecommunicatio

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

The idea behind CSSC Offshore Marine and Hutchison Telecommunications Hong 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.