Correlation Between CSSC Offshore and Norwegian Air

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

Diversification Opportunities for CSSC Offshore and Norwegian Air

0.4

Correlation Coefficient

CSSC Offshore  Norwegian Air

Very weak diversification

The 3 months correlation between CSSC and Norwegian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Norwegian Air Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Air Shuttle 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 Norwegian Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Air Shuttle has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Norwegian Air go up and down completely randomly.

Pair Corralation between CSSC Offshore and Norwegian Air

Assuming the 90 days trading horizon CSSC Offshore is expected to generate 38.79 times less return on investment than Norwegian Air. But when comparing it to its historical volatility, CSSC Offshore Marine is 27.58 times less risky than Norwegian Air. It trades about 0.13 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  111.00  in Norwegian Air Shuttle on April 23, 2025 and sell it today you would earn a total of  38.00  from holding Norwegian Air Shuttle or generate 34.23% return on investment over 90 days.

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

CSSC Offshore Marine  vs.  Norwegian Air Shuttle

CSSC Offshore Marine

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSSC Offshore Marine are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CSSC Offshore is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Norwegian Air Shuttle

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Norwegian Air Shuttle are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Norwegian Air reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSSC Offshore and Norwegian Air

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

The idea behind CSSC Offshore Marine and Norwegian Air Shuttle 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.