Correlation Between CSSC Offshore and CeoTronics

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

Diversification Opportunities for CSSC Offshore and CeoTronics

-0.36

Correlation Coefficient

CSSC Offshore  CeoTronics

Very good diversification

The 3 months correlation between CSSC and CeoTronics is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and CeoTronics go up and down completely randomly.

Pair Corralation between CSSC Offshore and CeoTronics

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the CeoTronics. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 5.63 times less risky than CeoTronics. The stock trades about -0.23 of its potential returns per unit of risk. The CeoTronics AG is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  580.00  in CeoTronics AG on December 24, 2024 and sell it today you would earn a total of  410.00  from holding CeoTronics AG or generate 70.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

CSSC Offshore Marine  vs.  CeoTronics AG

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 fragile 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.

CeoTronics AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CeoTronics AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, CeoTronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and CeoTronics

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

The idea behind CSSC Offshore Marine and CeoTronics AG 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..