Correlation Between CSSC Offshore and Byggmax Group

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

Diversification Opportunities for CSSC Offshore and Byggmax Group

-0.25

Correlation Coefficient

CSSC Offshore  Byggmax Group

Very good diversification

The 3 months correlation between CSSC and Byggmax is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax Group AB 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 Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Byggmax Group go up and down completely randomly.

Pair Corralation between CSSC Offshore and Byggmax Group

If you would invest  404.00  in Byggmax Group AB on December 4, 2024 and sell it today you would earn a total of  37.00  from holding Byggmax Group AB or generate 9.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

CSSC Offshore Marine  vs.  Byggmax Group AB

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

Byggmax Group AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Byggmax Group AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Byggmax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and Byggmax Group

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

The idea behind CSSC Offshore Marine and Byggmax Group AB 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.