Correlation Between CSSC Offshore and SBA Communications

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

Diversification Opportunities for CSSC Offshore and SBA Communications

0.37

Correlation Coefficient

CSSC Offshore  SBA Communications

Weak diversification

The 3 months correlation between CSSC and SBA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and SBA Communications go up and down completely randomly.

Pair Corralation between CSSC Offshore and SBA Communications

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 2.11 times more return on investment than SBA Communications. However, CSSC Offshore is 2.11 times more volatile than SBA Communications Corp. It trades about 0.2 of its potential returns per unit of risk. SBA Communications Corp is currently generating about -0.32 per unit of risk. If you would invest  121.00  in CSSC Offshore Marine on October 6, 2024 and sell it today you would earn a total of  10.00  from holding CSSC Offshore Marine or generate 8.26% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  SBA Communications Corp

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.

SBA Communications Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBA Communications Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with CSSC Offshore and SBA Communications

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

The idea behind CSSC Offshore Marine and SBA Communications Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.