Correlation Between CSSC Offshore and BURLINGTON STORES

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

Diversification Opportunities for CSSC Offshore and BURLINGTON STORES

-0.8

Correlation Coefficient

CSSC Offshore  BURLINGTON STORES

Pay attention - limited upside

The 3 months correlation between CSSC and BURLINGTON is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and BURLINGTON STORES go up and down completely randomly.

Pair Corralation between CSSC Offshore and BURLINGTON STORES

Assuming the 90 days trading horizon CSSC Offshore is expected to generate 2.08 times less return on investment than BURLINGTON STORES. In addition to that, CSSC Offshore is 1.2 times more volatile than BURLINGTON STORES. It trades about 0.05 of its total potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.13 per unit of volatility. If you would invest  11,000  in BURLINGTON STORES on September 24, 2024 and sell it today you would earn a total of  16,000  from holding BURLINGTON STORES or generate 145.45% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  BURLINGTON STORES

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 comparatively stable basic indicators, CSSC Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BURLINGTON STORES

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BURLINGTON STORES are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, BURLINGTON STORES may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CSSC Offshore and BURLINGTON STORES

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

The idea behind CSSC Offshore Marine and BURLINGTON STORES 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.