Correlation Between AUST AGRICULTURAL and Cass Information
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL 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 AUST AGRICULTURAL and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and Cass Information Systems, you can compare the effects of market volatilities on AUST AGRICULTURAL 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 AUST AGRICULTURAL with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and Cass Information.
Diversification Opportunities for AUST AGRICULTURAL and Cass Information
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUST and Cass is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL 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 AUST AGRICULTURAL 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 AUST AGRICULTURAL 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 AUST AGRICULTURAL i.e., AUST AGRICULTURAL and Cass Information go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and Cass Information
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to under-perform the Cass Information. But the stock apears to be less risky and, when comparing its historical volatility, AUST AGRICULTURAL is 1.09 times less risky than Cass Information. The stock trades about -0.01 of its potential returns per unit of risk. The Cass Information Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,753 in Cass Information Systems on August 31, 2024 and sell it today you would earn a total of 467.00 from holding Cass Information Systems or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. Cass Information Systems
Performance |
| Timeline |
| AUST AGRICULTURAL |
| Cass Information Systems |
AUST AGRICULTURAL and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and Cass Information
The main advantage of trading using opposite AUST AGRICULTURAL and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL 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.| AUST AGRICULTURAL vs. SIVERS SEMICONDUCTORS AB | AUST AGRICULTURAL vs. Darden Restaurants | AUST AGRICULTURAL vs. Reliance Steel Aluminum | AUST AGRICULTURAL vs. Q2M Managementberatung AG |
| Cass Information vs. Singapore Telecommunications Limited | Cass Information vs. SBA Communications Corp | Cass Information vs. Tower One Wireless | Cass Information vs. Verizon Communications |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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