Correlation Between CSSC Offshore and SES SA
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and SES SA 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 SES SA 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 SES SA, you can compare the effects of market volatilities on CSSC Offshore and SES SA 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and SES SA.
Diversification Opportunities for CSSC Offshore and SES SA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CSSC and SES is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and SES SA go up and down completely randomly.
Pair Corralation between CSSC Offshore and SES SA
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 1.82 times more return on investment than SES SA. However, CSSC Offshore is 1.82 times more volatile than SES SA. It trades about -0.08 of its potential returns per unit of risk. SES SA is currently generating about -0.26 per unit of risk. If you would invest 151.00 in CSSC Offshore Marine on September 12, 2024 and sell it today you would lose (26.00) from holding CSSC Offshore Marine or give up 17.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CSSC Offshore Marine vs. SES SA
Performance |
Timeline |
CSSC Offshore Marine |
SES SA |
CSSC Offshore and SES SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CSSC Offshore and SES SA
The main advantage of trading using opposite CSSC Offshore and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc | CSSC Offshore vs. Apple Inc |
SES SA vs. Ross Stores | SES SA vs. GALENA MINING LTD | SES SA vs. WT OFFSHORE | SES SA vs. CSSC Offshore Marine |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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