Correlation Between Rogers Communications and CSSC Offshore

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

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

Diversification Opportunities for Rogers Communications and CSSC Offshore

0.65

Correlation Coefficient

Rogers Communications  CSSC Offshore

Poor diversification

The 3 months correlation between Rogers and CSSC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications 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 Rogers Communications 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 Rogers Communications 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 Rogers Communications i.e., Rogers Communications and CSSC Offshore go up and down completely randomly.

Pair Corralation between Rogers Communications and CSSC Offshore

Assuming the 90 days trading horizon Rogers Communications is expected to generate 1.91 times more return on investment than CSSC Offshore. However, Rogers Communications is 1.91 times more volatile than CSSC Offshore Marine. It trades about -0.1 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.22 per unit of risk. If you would invest  2,865  in Rogers Communications on December 29, 2024 and sell it today you would lose (305.00) from holding Rogers Communications or give up 10.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Rogers Communications  vs.  CSSC Offshore Marine

Rogers Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 fragile 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.

Pair Trading with Rogers Communications and CSSC Offshore

The main advantage of trading using opposite Rogers Communications and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications 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 Rogers Communications 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.