Correlation Between Cass Information and Industria
Can any of the company-specific risk be diversified away by investing in both Cass Information and Industria 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 Industria 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 Industria de Diseno, you can compare the effects of market volatilities on Cass Information and Industria 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 Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Industria.
Diversification Opportunities for Cass Information and Industria
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cass and Industria is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno 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 Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Cass Information i.e., Cass Information and Industria go up and down completely randomly.
Pair Corralation between Cass Information and Industria
Assuming the 90 days horizon Cass Information is expected to generate 4.83 times less return on investment than Industria. In addition to that, Cass Information is 1.36 times more volatile than Industria de Diseno. It trades about 0.02 of its total potential returns per unit of risk. Industria de Diseno is currently generating about 0.11 per unit of volatility. If you would invest 2,400 in Industria de Diseno on September 14, 2024 and sell it today you would earn a total of 2,543 from holding Industria de Diseno or generate 105.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cass Information Systems vs. Industria de Diseno
Performance |
| Timeline |
| Cass Information Systems |
| Industria de Diseno |
Cass Information and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Industria
The main advantage of trading using opposite Cass Information and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria's long position.| Cass Information vs. Media and Games | Cass Information vs. SOLSTAD OFFSHORE NK | Cass Information vs. ANGLER GAMING PLC | Cass Information vs. WT OFFSHORE |
| Industria vs. PUBLIC STORAGE PRFO | Industria vs. Datang International Power | Industria vs. CVS Health | Industria 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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