Correlation Between PROSIEBENSAT1 MEDIADR4 and CSSC Offshore

Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4 and CSSC Offshore 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 PROSIEBENSAT1 MEDIADR4 and CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and CSSC Offshore Marine, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4 and CSSC Offshore 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 PROSIEBENSAT1 MEDIADR4 with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4 and CSSC Offshore.

Diversification Opportunities for PROSIEBENSAT1 MEDIADR4 and CSSC Offshore

0.68

Correlation Coefficient

PROSIEBENSAT1 MEDIADR4  CSSC Offshore

Poor diversification

The 3 months correlation between PROSIEBENSAT1 and CSSC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine and PROSIEBENSAT1 MEDIADR4 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 PROSIEBENSAT1 MEDIADR4 are associated (or correlated) with CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of PROSIEBENSAT1 MEDIADR4 i.e., PROSIEBENSAT1 MEDIADR4 and CSSC Offshore go up and down completely randomly.

Pair Corralation between PROSIEBENSAT1 MEDIADR4 and CSSC Offshore

Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4 is expected to generate 0.98 times more return on investment than CSSC Offshore. However, PROSIEBENSAT1 MEDIADR4 is 1.02 times less risky than CSSC Offshore. It trades about -0.08 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.15 per unit of risk. If you would invest  150.00  in PROSIEBENSAT1 MEDIADR4 on October 6, 2024 and sell it today you would lose (20.00) from holding PROSIEBENSAT1 MEDIADR4 or give up 13.33% of portfolio value over 90 days.

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

PROSIEBENSAT1 MEDIADR4  vs.  CSSC Offshore Marine

PROSIEBENSAT1 MEDIADR4

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PROSIEBENSAT1 MEDIADR4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with PROSIEBENSAT1 MEDIADR4 and CSSC Offshore

The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4 and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4 position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.

The idea behind PROSIEBENSAT1 MEDIADR4 and CSSC Offshore Marine 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..