Correlation Between CSSC Offshore and Topsec Technologies

Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Topsec Technologies 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 Topsec Technologies 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 Topsec Technologies Group, you can compare the effects of market volatilities on CSSC Offshore and Topsec Technologies 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 Topsec Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Topsec Technologies.

Diversification Opportunities for CSSC Offshore and Topsec Technologies

0.77

Correlation Coefficient

CSSC Offshore  Topsec Technologies

Poor diversification

The 3 months correlation between CSSC and Topsec is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Topsec Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topsec Technologies 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 Topsec Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topsec Technologies has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Topsec Technologies go up and down completely randomly.

Pair Corralation between CSSC Offshore and Topsec Technologies

Assuming the 90 days trading horizon CSSC Offshore Marine is expected to generate 0.69 times more return on investment than Topsec Technologies. However, CSSC Offshore Marine is 1.45 times less risky than Topsec Technologies. It trades about 0.18 of its potential returns per unit of risk. Topsec Technologies Group is currently generating about 0.1 per unit of risk. If you would invest  2,364  in CSSC Offshore Marine on April 23, 2025 and sell it today you would earn a total of  416.00  from holding CSSC Offshore Marine or generate 17.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

CSSC Offshore Marine  vs.  Topsec Technologies Group

CSSC Offshore Marine

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSSC Offshore Marine are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CSSC Offshore sustained solid returns over the last few months and may actually be approaching a breakup point.

Topsec Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Topsec Technologies Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Topsec Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and Topsec Technologies

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

The idea behind CSSC Offshore Marine and Topsec Technologies Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.