Correlation Between JPM INDIAN and Cass Information
Can any of the company-specific risk be diversified away by investing in both JPM INDIAN 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 JPM INDIAN and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPM INDIAN INVT and Cass Information Systems, you can compare the effects of market volatilities on JPM INDIAN 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 JPM INDIAN with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM INDIAN and Cass Information.
Diversification Opportunities for JPM INDIAN and Cass Information
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between JPM and Cass is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding JPM INDIAN INVT 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 JPM INDIAN 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 JPM INDIAN INVT 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 JPM INDIAN i.e., JPM INDIAN and Cass Information go up and down completely randomly.
Pair Corralation between JPM INDIAN and Cass Information
Assuming the 90 days horizon JPM INDIAN INVT is expected to generate 0.7 times more return on investment than Cass Information. However, JPM INDIAN INVT is 1.43 times less risky than Cass Information. It trades about 0.05 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.03 per unit of risk. If you would invest 1,040 in JPM INDIAN INVT on September 4, 2024 and sell it today you would earn a total of 190.00 from holding JPM INDIAN INVT or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPM INDIAN INVT vs. Cass Information Systems
Performance |
| Timeline |
| JPM INDIAN INVT |
| Cass Information Systems |
JPM INDIAN and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM INDIAN and Cass Information
The main advantage of trading using opposite JPM INDIAN and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM INDIAN 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.| JPM INDIAN vs. Cass Information Systems | JPM INDIAN vs. Ultra Clean Holdings | JPM INDIAN vs. 24SEVENOFFICE GROUP AB | JPM INDIAN vs. Pure Storage |
| Cass Information vs. Elis SA | Cass Information vs. Superior Plus Corp | Cass Information vs. NMI Holdings | Cass Information vs. Origin Agritech |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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