Correlation Between Cass Information and ARISTOCRAT LEISURE
Can any of the company-specific risk be diversified away by investing in both Cass Information and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE, you can compare the effects of market volatilities on Cass Information and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and ARISTOCRAT LEISURE.
Diversification Opportunities for Cass Information and ARISTOCRAT LEISURE
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cass and ARISTOCRAT is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and ARISTOCRAT LEISURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARISTOCRAT LEISURE has no effect on the direction of Cass Information i.e., Cass Information and ARISTOCRAT LEISURE go up and down completely randomly.
Pair Corralation between Cass Information and ARISTOCRAT LEISURE
Assuming the 90 days horizon Cass Information Systems is expected to under-perform the ARISTOCRAT LEISURE. In addition to that, Cass Information is 1.22 times more volatile than ARISTOCRAT LEISURE. It trades about -0.36 of its total potential returns per unit of risk. ARISTOCRAT LEISURE is currently generating about 0.19 per unit of volatility. If you would invest 4,140 in ARISTOCRAT LEISURE on October 11, 2024 and sell it today you would earn a total of 140.00 from holding ARISTOCRAT LEISURE or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
Cass Information Systems vs. ARISTOCRAT LEISURE
Performance |
| Timeline |
| Cass Information Systems |
| ARISTOCRAT LEISURE |
Cass Information and ARISTOCRAT LEISURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and ARISTOCRAT LEISURE
The main advantage of trading using opposite Cass Information and ARISTOCRAT LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE will offset losses from the drop in ARISTOCRAT LEISURE'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 |
| ARISTOCRAT LEISURE vs. TITAN MACHINERY | ARISTOCRAT LEISURE vs. Dairy Farm International | ARISTOCRAT LEISURE vs. WIMFARM SA EO | ARISTOCRAT LEISURE vs. Sumitomo Mitsui Construction |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |