Correlation Between CSSC Offshore and Selective Insurance
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Selective Insurance 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 Selective Insurance 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 Selective Insurance Group, you can compare the effects of market volatilities on CSSC Offshore and Selective Insurance 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 Selective Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Selective Insurance.
Diversification Opportunities for CSSC Offshore and Selective Insurance
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CSSC and Selective is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Selective Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selective Insurance 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 Selective Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selective Insurance has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Selective Insurance go up and down completely randomly.
Pair Corralation between CSSC Offshore and Selective Insurance
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Selective Insurance. But the stock apears to be less risky and, when comparing its historical volatility, CSSC Offshore Marine is 4.25 times less risky than Selective Insurance. The stock trades about -0.22 of its potential returns per unit of risk. The Selective Insurance Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,610 in Selective Insurance Group on December 28, 2024 and sell it today you would lose (310.00) from holding Selective Insurance Group or give up 3.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.39% |
Values | Daily Returns |
CSSC Offshore Marine vs. Selective Insurance Group
Performance |
Timeline |
CSSC Offshore Marine |
Selective Insurance |
CSSC Offshore and Selective Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CSSC Offshore and Selective Insurance
The main advantage of trading using opposite CSSC Offshore and Selective Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Selective Insurance 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 Selective Insurance will offset losses from the drop in Selective Insurance's long position.CSSC Offshore vs. GOLD ROAD RES | CSSC Offshore vs. NAGOYA RAILROAD | CSSC Offshore vs. Liberty Broadband | CSSC Offshore vs. Coor Service Management |
Selective Insurance vs. The Progressive | Selective Insurance vs. The Allstate | Selective Insurance vs. PICC Property and | Selective Insurance vs. Cincinnati Financial |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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