Correlation Between Aramark Holdings and Cass Information
Can any of the company-specific risk be diversified away by investing in both Aramark Holdings 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 Aramark Holdings and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aramark Holdings and Cass Information Systems, you can compare the effects of market volatilities on Aramark Holdings 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 Aramark Holdings with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramark Holdings and Cass Information.
Diversification Opportunities for Aramark Holdings and Cass Information
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aramark and Cass is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aramark Holdings 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 Aramark Holdings 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 Aramark Holdings 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 Aramark Holdings i.e., Aramark Holdings and Cass Information go up and down completely randomly.
Pair Corralation between Aramark Holdings and Cass Information
Given the investment horizon of 90 days Aramark Holdings is expected to generate 1.15 times less return on investment than Cass Information. But when comparing it to its historical volatility, Aramark Holdings is 1.2 times less risky than Cass Information. It trades about 0.16 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,154 in Cass Information Systems on August 24, 2024 and sell it today you would earn a total of 276.00 from holding Cass Information Systems or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aramark Holdings vs. Cass Information Systems
Performance |
| Timeline |
| Aramark Holdings |
| Cass Information Systems |
Aramark Holdings and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aramark Holdings and Cass Information
The main advantage of trading using opposite Aramark Holdings and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aramark Holdings 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.| Aramark Holdings vs. Civeo Corp | Aramark Holdings vs. ABM Industries Incorporated | Aramark Holdings vs. ADM Endeavors | Aramark Holdings vs. Maximus |
| Cass Information vs. First Advantage Corp | Cass Information vs. Rentokil Initial PLC | Cass Information vs. CBIZ Inc | Cass Information vs. Civeo Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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