Correlation Between Automatic Data and Cass Information
Can any of the company-specific risk be diversified away by investing in both Automatic Data 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 Automatic Data and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Cass Information Systems, you can compare the effects of market volatilities on Automatic Data 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 Automatic Data with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Cass Information.
Diversification Opportunities for Automatic Data and Cass Information
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Automatic and Cass is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing 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 Automatic Data 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 Automatic Data Processing 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 Automatic Data i.e., Automatic Data and Cass Information go up and down completely randomly.
Pair Corralation between Automatic Data and Cass Information
Assuming the 90 days horizon Automatic Data Processing is expected to generate 0.57 times more return on investment than Cass Information. However, Automatic Data Processing is 1.76 times less risky than Cass Information. It trades about 0.33 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.15 per unit of risk. If you would invest 26,715 in Automatic Data Processing on August 30, 2024 and sell it today you would earn a total of 2,320 from holding Automatic Data Processing or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Automatic Data Processing vs. Cass Information Systems
Performance |
| Timeline |
| Automatic Data Processing |
| Cass Information Systems |
Automatic Data and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Cass Information
The main advantage of trading using opposite Automatic Data and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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.| Automatic Data vs. Superior Plus Corp | Automatic Data vs. SIVERS SEMICONDUCTORS AB | Automatic Data vs. Talanx AG | Automatic Data vs. 2G ENERGY |
| Cass Information vs. Superior Plus Corp | Cass Information vs. SIVERS SEMICONDUCTORS AB | Cass Information vs. Talanx AG | Cass Information vs. 2G ENERGY |
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.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |