Correlation Between Cass Information and Chongqing Machinery
Can any of the company-specific risk be diversified away by investing in both Cass Information and Chongqing Machinery 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 Chongqing Machinery 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 Chongqing Machinery Electric, you can compare the effects of market volatilities on Cass Information and Chongqing Machinery 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 Chongqing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Chongqing Machinery.
Diversification Opportunities for Cass Information and Chongqing Machinery
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cass and Chongqing is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Chongqing Machinery Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Machinery 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 Chongqing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Machinery has no effect on the direction of Cass Information i.e., Cass Information and Chongqing Machinery go up and down completely randomly.
Pair Corralation between Cass Information and Chongqing Machinery
Assuming the 90 days horizon Cass Information Systems is expected to generate 1.0 times more return on investment than Chongqing Machinery. However, Cass Information is 1.0 times more volatile than Chongqing Machinery Electric. It trades about 0.18 of its potential returns per unit of risk. Chongqing Machinery Electric is currently generating about 0.0 per unit of risk. If you would invest 3,900 in Cass Information Systems on August 28, 2024 and sell it today you would earn a total of 320.00 from holding Cass Information Systems or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cass Information Systems vs. Chongqing Machinery Electric
Performance |
| Timeline |
| Cass Information Systems |
| Chongqing Machinery |
Cass Information and Chongqing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Chongqing Machinery
The main advantage of trading using opposite Cass Information and Chongqing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Chongqing Machinery 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 Chongqing Machinery will offset losses from the drop in Chongqing Machinery's long position.| Cass Information vs. JJ SNACK FOODS | Cass Information vs. CN MODERN DAIRY | Cass Information vs. AUST AGRICULTURAL | Cass Information vs. AUSNUTRIA DAIRY |
| Chongqing Machinery vs. Park Hotels Resorts | Chongqing Machinery vs. Materialise NV | Chongqing Machinery vs. InterContinental Hotels Group | Chongqing Machinery vs. Summit Hotel Properties |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |