Correlation Between CSSC Offshore and Easterly Government

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

Diversification Opportunities for CSSC Offshore and Easterly Government

0.43

Correlation Coefficient

CSSC Offshore  Easterly Government

Very weak diversification

The 3 months correlation between CSSC and Easterly is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Easterly Government Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easterly Government 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 Easterly Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easterly Government has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Easterly Government go up and down completely randomly.

Pair Corralation between CSSC Offshore and Easterly Government

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Easterly Government. In addition to that, CSSC Offshore is 1.54 times more volatile than Easterly Government Properties. It trades about -0.01 of its total potential returns per unit of risk. Easterly Government Properties is currently generating about 0.06 per unit of volatility. If you would invest  1,104  in Easterly Government Properties on October 8, 2024 and sell it today you would earn a total of  16.00  from holding Easterly Government Properties or generate 1.45% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  Easterly Government Properties

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Easterly Government

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Easterly Government Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Easterly Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CSSC Offshore and Easterly Government

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

The idea behind CSSC Offshore Marine and Easterly Government Properties 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.