Correlation Between Cass Information and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Cass Information and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Cass Information and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Hollywood Bowl.
Diversification Opportunities for Cass Information and Hollywood Bowl
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cass and Hollywood is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Cass Information i.e., Cass Information and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Cass Information and Hollywood Bowl
Assuming the 90 days horizon Cass Information is expected to generate 3.06 times less return on investment than Hollywood Bowl. But when comparing it to its historical volatility, Cass Information Systems is 1.01 times less risky than Hollywood Bowl. It trades about 0.02 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 250.00 in Hollywood Bowl Group on September 5, 2024 and sell it today you would earn a total of 130.00 from holding Hollywood Bowl Group or generate 52.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Hollywood Bowl Group
Performance |
| Timeline |
| Cass Information Systems |
| Hollywood Bowl Group |
Cass Information and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Hollywood Bowl
The main advantage of trading using opposite Cass Information and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Cass Information vs. Superior Plus Corp | Cass Information vs. NMI Holdings | Cass Information vs. Origin Agritech | Cass Information vs. SIVERS SEMICONDUCTORS AB |
| Hollywood Bowl vs. Compugroup Medical SE | Hollywood Bowl vs. PUBLIC STORAGE PRFO | Hollywood Bowl vs. IMAGIN MEDICAL INC | Hollywood Bowl vs. Cass Information Systems |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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