Correlation Between CSSC Offshore and DALATA HOTEL

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

Diversification Opportunities for CSSC Offshore and DALATA HOTEL

-0.37

Correlation Coefficient

CSSC Offshore  DALATA HOTEL

Very good diversification

The 3 months correlation between CSSC and DALATA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and DALATA HOTEL go up and down completely randomly.

Pair Corralation between CSSC Offshore and DALATA HOTEL

Assuming the 90 days trading horizon CSSC Offshore is expected to generate 1.29 times less return on investment than DALATA HOTEL. But when comparing it to its historical volatility, CSSC Offshore Marine is 1.36 times less risky than DALATA HOTEL. It trades about 0.04 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  299.00  in DALATA HOTEL on September 2, 2024 and sell it today you would earn a total of  118.00  from holding DALATA HOTEL or generate 39.46% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  DALATA HOTEL

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 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.

DALATA HOTEL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DALATA HOTEL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, DALATA HOTEL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CSSC Offshore and DALATA HOTEL

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

The idea behind CSSC Offshore Marine and DALATA HOTEL 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.