Correlation Between Cass Information and Gold Road
Can any of the company-specific risk be diversified away by investing in both Cass Information and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on Cass Information and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Gold Road.
Diversification Opportunities for Cass Information and Gold Road
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cass and Gold is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Cass Information i.e., Cass Information and Gold Road go up and down completely randomly.
Pair Corralation between Cass Information and Gold Road
Assuming the 90 days horizon Cass Information Systems is expected to generate 0.75 times more return on investment than Gold Road. However, Cass Information Systems is 1.33 times less risky than Gold Road. It trades about 0.05 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.02 per unit of risk. If you would invest 3,892 in Cass Information Systems on October 1, 2024 and sell it today you would earn a total of 108.00 from holding Cass Information Systems or generate 2.77% 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. Gold Road Resources
Performance |
| Timeline |
| Cass Information Systems |
| Gold Road Resources |
Cass Information and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Gold Road
The main advantage of trading using opposite Cass Information and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| Cass Information vs. RENTOKIL INITIAL ADR5 | Cass Information vs. INPOST SA EO | Cass Information vs. Elis SA | Cass Information vs. PARK24 LTD |
| Gold Road vs. Pebblebrook Hotel Trust | Gold Road vs. DALATA HOTEL | Gold Road vs. INTERCONT HOTELS | Gold Road vs. Dalata Hotel Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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