Correlation Between Cass Information and Team
Can any of the company-specific risk be diversified away by investing in both Cass Information and Team 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 Cass Information and Team into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and Team Inc, you can compare the effects of market volatilities on Cass Information and Team 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 Cass Information with a short position of Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Team.
Diversification Opportunities for Cass Information and Team
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cass and Team is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Team Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Inc and Cass Information 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 Cass Information Systems are associated (or correlated) with Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Inc has no effect on the direction of Cass Information i.e., Cass Information and Team go up and down completely randomly.
Pair Corralation between Cass Information and Team
Given the investment horizon of 90 days Cass Information is expected to generate 7.36 times less return on investment than Team. But when comparing it to its historical volatility, Cass Information Systems is 2.23 times less risky than Team. It trades about 0.08 of its potential returns per unit of risk. Team Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,369 in Team Inc on November 3, 2024 and sell it today you would earn a total of 311.00 from holding Team Inc or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Team Inc
Performance |
| Timeline |
| Cass Information Systems |
| Team Inc |
Cass Information and Team Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Team
The main advantage of trading using opposite Cass Information and Team positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Team 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 Team will offset losses from the drop in Team's long position.| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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