Correlation Between CSSC Offshore and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical, you can compare the effects of market volatilities on CSSC Offshore and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Quaker Chemical.
Diversification Opportunities for CSSC Offshore and Quaker Chemical
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CSSC and Quaker is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Quaker Chemical go up and down completely randomly.
Pair Corralation between CSSC Offshore and Quaker Chemical
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.44 times more return on investment than Quaker Chemical. However, CSSC Offshore Marine is 2.29 times less risky than Quaker Chemical. It trades about -0.19 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.09 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 | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CSSC Offshore Marine vs. Quaker Chemical
Performance |
Timeline |
CSSC Offshore Marine |
Quaker Chemical |
CSSC Offshore and Quaker Chemical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CSSC Offshore and Quaker Chemical
The main advantage of trading using opposite CSSC Offshore and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.CSSC Offshore vs. BW OFFSHORE LTD | CSSC Offshore vs. Spirent Communications plc | CSSC Offshore vs. EIDESVIK OFFSHORE NK | CSSC Offshore vs. Cellnex Telecom SA |
Quaker Chemical vs. SUN ART RETAIL | Quaker Chemical vs. De Grey Mining | Quaker Chemical vs. H2O Retailing | Quaker Chemical vs. Tradeweb Markets |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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