Correlation Between CSSC Offshore and AGF Management

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

Diversification Opportunities for CSSC Offshore and AGF Management

-0.24

Correlation Coefficient

CSSC Offshore  AGF Management

Very good diversification

The 3 months correlation between CSSC and AGF is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management 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 AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and AGF Management go up and down completely randomly.

Pair Corralation between CSSC Offshore and AGF Management

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.42 times more return on investment than AGF Management. However, CSSC Offshore Marine is 2.39 times less risky than AGF Management. It trades about -0.16 of its potential returns per unit of risk. AGF Management Limited is currently generating about -0.08 per unit of risk. If you would invest  133.00  in CSSC Offshore Marine on December 19, 2024 and sell it today you would lose (11.00) from holding CSSC Offshore Marine or give up 8.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

CSSC Offshore Marine  vs.  AGF Management Limited

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 unsteady 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.

AGF Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGF Management Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CSSC Offshore and AGF Management

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

The idea behind CSSC Offshore Marine and AGF Management Limited 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.