Correlation Between Cass Information and Nestl SA
Can any of the company-specific risk be diversified away by investing in both Cass Information and Nestl SA 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 Nestl SA 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 Nestl SA, you can compare the effects of market volatilities on Cass Information and Nestl SA 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 Nestl SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Nestl SA.
Diversification Opportunities for Cass Information and Nestl SA
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cass and Nestl is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Nestl SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nestl SA 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 Nestl SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nestl SA has no effect on the direction of Cass Information i.e., Cass Information and Nestl SA go up and down completely randomly.
Pair Corralation between Cass Information and Nestl SA
Assuming the 90 days horizon Cass Information is expected to generate 1.3 times less return on investment than Nestl SA. In addition to that, Cass Information is 1.12 times more volatile than Nestl SA. It trades about 0.12 of its total potential returns per unit of risk. Nestl SA is currently generating about 0.17 per unit of volatility. If you would invest 7,840 in Nestl SA on November 6, 2024 and sell it today you would earn a total of 440.00 from holding Nestl SA or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Nestl SA
Performance |
| Timeline |
| Cass Information Systems |
| Nestl SA |
Cass Information and Nestl SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Nestl SA
The main advantage of trading using opposite Cass Information and Nestl SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Nestl SA 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 Nestl SA will offset losses from the drop in Nestl SA's long position.| Cass Information vs. INFORMATION SVC GRP | Cass Information vs. Ribbon Communications | Cass Information vs. Highlight Communications AG | Cass Information vs. Pure Storage |
| Nestl SA vs. Corsair Gaming | Nestl SA vs. Nippon Steel | Nestl SA vs. LAir Liquide SA | Nestl SA vs. Ryanair Holdings plc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |