Correlation Between CSSC Offshore and Fast Retailing

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

Diversification Opportunities for CSSC Offshore and Fast Retailing

0.71

Correlation Coefficient

CSSC Offshore  Fast Retailing

Poor diversification

The 3 months correlation between CSSC and Fast is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Fast Retailing go up and down completely randomly.

Pair Corralation between CSSC Offshore and Fast Retailing

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.5 times more return on investment than Fast Retailing. However, CSSC Offshore Marine is 2.01 times less risky than Fast Retailing. It trades about -0.19 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.14 per unit of risk. If you would invest  135.00  in CSSC Offshore Marine on December 21, 2024 and sell it today you would lose (13.00) from holding CSSC Offshore Marine or give up 9.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

CSSC Offshore Marine  vs.  Fast Retailing Co

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 unsteady 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.

Fast Retailing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fast Retailing Co 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 rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CSSC Offshore and Fast Retailing

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

The idea behind CSSC Offshore Marine and Fast Retailing Co 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.