Correlation Between GPT and Cass Information
Can any of the company-specific risk be diversified away by investing in both GPT 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 GPT and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GPT Group and Cass Information Systems, you can compare the effects of market volatilities on GPT 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 GPT with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT and Cass Information.
Diversification Opportunities for GPT and Cass Information
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GPT and Cass is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GPT Group 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 GPT 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 GPT Group 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 GPT i.e., GPT and Cass Information go up and down completely randomly.
Pair Corralation between GPT and Cass Information
Assuming the 90 days horizon GPT Group is expected to under-perform the Cass Information. In addition to that, GPT is 1.77 times more volatile than Cass Information Systems. It trades about -0.03 of its total potential returns per unit of risk. Cass Information Systems is currently generating about 0.01 per unit of volatility. If you would invest 4,150 in Cass Information Systems on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Cass Information Systems or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GPT Group vs. Cass Information Systems
Performance |
| Timeline |
| GPT Group |
| Cass Information Systems |
GPT and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GPT and Cass Information
The main advantage of trading using opposite GPT and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT 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.| GPT vs. Superior Plus Corp | GPT vs. SIVERS SEMICONDUCTORS AB | GPT vs. CHINA HUARONG ENERHD 50 | GPT vs. NORDIC HALIBUT AS |
| Cass Information vs. Cintas | Cass Information vs. RELO GROUP INC | Cass Information vs. Superior Plus Corp | Cass Information vs. SIVERS SEMICONDUCTORS AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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