Correlation Between CSSC Offshore and Apple

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

Diversification Opportunities for CSSC Offshore and Apple

-0.6

Correlation Coefficient

CSSC Offshore  Apple

Excellent diversification

The 3 months correlation between CSSC and Apple is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Apple go up and down completely randomly.

Pair Corralation between CSSC Offshore and Apple

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Apple. In addition to that, CSSC Offshore is 2.41 times more volatile than Apple Inc. It trades about -0.07 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of volatility. If you would invest  20,725  in Apple Inc on August 31, 2024 and sell it today you would earn a total of  1,585  from holding Apple Inc or generate 7.65% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  Apple Inc

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 December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Apple Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with CSSC Offshore and Apple

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

The idea behind CSSC Offshore Marine and Apple Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.