Correlation Between Lion Biotechnologies and Cass Information
Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and Cass Information 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 Lion Biotechnologies and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Biotechnologies and Cass Information Systems, you can compare the effects of market volatilities on Lion Biotechnologies and Cass Information 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 Lion Biotechnologies with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and Cass Information.
Diversification Opportunities for Lion Biotechnologies and Cass Information
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Cass is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and Cass Information go up and down completely randomly.
Pair Corralation between Lion Biotechnologies and Cass Information
Assuming the 90 days trading horizon Lion Biotechnologies is expected to under-perform the Cass Information. In addition to that, Lion Biotechnologies is 2.35 times more volatile than Cass Information Systems. It trades about -0.19 of its total potential returns per unit of risk. Cass Information Systems is currently generating about 0.18 per unit of volatility. If you would invest 3,840 in Cass Information Systems on August 25, 2024 and sell it today you would earn a total of 320.00 from holding Cass Information Systems or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Biotechnologies vs. Cass Information Systems
Performance |
| Timeline |
| Lion Biotechnologies |
| Cass Information Systems |
Lion Biotechnologies and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Biotechnologies and Cass Information
The main advantage of trading using opposite Lion Biotechnologies and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| Lion Biotechnologies vs. TAL Education Group | Lion Biotechnologies vs. PICKN PAY STORES | Lion Biotechnologies vs. MARKET VECTR RETAIL | Lion Biotechnologies vs. IDP EDUCATION LTD |
| Cass Information vs. Austevoll Seafood ASA | Cass Information vs. Beazer Homes USA | Cass Information vs. CENTURIA OFFICE REIT | Cass Information vs. United Natural Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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