Correlation Between CSSC Offshore and Warner Music
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on CSSC Offshore and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Warner Music.
Diversification Opportunities for CSSC Offshore and Warner Music
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSSC and Warner is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of CSSC Offshore i.e., CSSC Offshore and Warner Music go up and down completely randomly.
Pair Corralation between CSSC Offshore and Warner Music
Assuming the 90 days trading horizon CSSC Offshore is expected to generate 16.13 times less return on investment than Warner Music. But when comparing it to its historical volatility, CSSC Offshore Marine is 19.28 times less risky than Warner Music. It trades about 0.13 of its potential returns per unit of risk. Warner Music Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,378 in Warner Music Group on April 21, 2025 and sell it today you would earn a total of 309.00 from holding Warner Music Group or generate 12.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
CSSC Offshore Marine vs. Warner Music Group
Performance |
Timeline |
CSSC Offshore Marine |
Warner Music Group |
CSSC Offshore and Warner Music Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CSSC Offshore and Warner Music
The main advantage of trading using opposite CSSC Offshore and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.CSSC Offshore vs. ACCSYS TECHPLC EO | CSSC Offshore vs. AAC TECHNOLOGHLDGADR | CSSC Offshore vs. FORTRESS BIOTECHPRFA 25 | CSSC Offshore vs. Bio Techne Corp |
Warner Music vs. China Railway Construction | Warner Music vs. Television Broadcasts Limited | Warner Music vs. Sterling Construction | Warner Music vs. BROADSTNET LEADL 00025 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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