Correlation Between Cass Information and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both Cass Information and PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS, you can compare the effects of market volatilities on Cass Information and PLAYMATES TOYS 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 PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and PLAYMATES TOYS.
Diversification Opportunities for Cass Information and PLAYMATES TOYS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cass and PLAYMATES is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS 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 PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of Cass Information i.e., Cass Information and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between Cass Information and PLAYMATES TOYS
Assuming the 90 days horizon Cass Information is expected to generate 63.92 times less return on investment than PLAYMATES TOYS. But when comparing it to its historical volatility, Cass Information Systems is 3.12 times less risky than PLAYMATES TOYS. It trades about 0.0 of its potential returns per unit of risk. PLAYMATES TOYS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.43 in PLAYMATES TOYS on October 11, 2024 and sell it today you would earn a total of 5.17 from holding PLAYMATES TOYS or generate 361.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cass Information Systems vs. PLAYMATES TOYS
Performance |
| Timeline |
| Cass Information Systems |
| PLAYMATES TOYS |
Cass Information and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and PLAYMATES TOYS
The main advantage of trading using opposite Cass Information and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| Cass Information vs. BE Semiconductor Industries | Cass Information vs. Amkor Technology | Cass Information vs. TOREX SEMICONDUCTOR LTD | Cass Information vs. MagnaChip Semiconductor Corp |
| PLAYMATES TOYS vs. FIREWEED METALS P | PLAYMATES TOYS vs. THAI BEVERAGE | PLAYMATES TOYS vs. National Beverage Corp | PLAYMATES TOYS vs. ARDAGH METAL PACDL 0001 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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