Correlation Between TAL Education and CSSC Offshore

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

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

Diversification Opportunities for TAL Education and CSSC Offshore

0.17

Correlation Coefficient

TAL Education  CSSC Offshore

Average diversification

The 3 months correlation between TAL and CSSC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group 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 TAL Education 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 TAL Education Group 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 TAL Education i.e., TAL Education and CSSC Offshore go up and down completely randomly.

Pair Corralation between TAL Education and CSSC Offshore

Assuming the 90 days trading horizon TAL Education Group is expected to generate 36.76 times more return on investment than CSSC Offshore. However, TAL Education is 36.76 times more volatile than CSSC Offshore Marine. It trades about 0.02 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.13 per unit of risk. If you would invest  915.00  in TAL Education Group on April 20, 2025 and sell it today you would lose (5.00) from holding TAL Education Group or give up 0.55% of portfolio value over 90 days.

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

TAL Education Group  vs.  CSSC Offshore Marine

TAL Education Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TAL Education Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TAL Education is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TAL Education and CSSC Offshore

The main advantage of trading using opposite TAL Education and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education 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 TAL Education Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.