Correlation Between Cass Information and NISSAN CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Cass Information and NISSAN CHEMICAL 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 NISSAN CHEMICAL 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 NISSAN CHEMICAL IND, you can compare the effects of market volatilities on Cass Information and NISSAN CHEMICAL 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 NISSAN CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and NISSAN CHEMICAL.
Diversification Opportunities for Cass Information and NISSAN CHEMICAL
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cass and NISSAN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and NISSAN CHEMICAL IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSAN CHEMICAL IND 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 NISSAN CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSAN CHEMICAL IND has no effect on the direction of Cass Information i.e., Cass Information and NISSAN CHEMICAL go up and down completely randomly.
Pair Corralation between Cass Information and NISSAN CHEMICAL
Assuming the 90 days horizon Cass Information Systems is expected to generate 1.12 times more return on investment than NISSAN CHEMICAL. However, Cass Information is 1.12 times more volatile than NISSAN CHEMICAL IND. It trades about 0.02 of its potential returns per unit of risk. NISSAN CHEMICAL IND is currently generating about -0.04 per unit of risk. If you would invest 3,772 in Cass Information Systems on November 27, 2024 and sell it today you would earn a total of 448.00 from holding Cass Information Systems or generate 11.88% 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. NISSAN CHEMICAL IND
Performance |
| Timeline |
| Cass Information Systems |
| NISSAN CHEMICAL IND |
Cass Information and NISSAN CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and NISSAN CHEMICAL
The main advantage of trading using opposite Cass Information and NISSAN CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, NISSAN CHEMICAL 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 NISSAN CHEMICAL will offset losses from the drop in NISSAN CHEMICAL's long position.| Cass Information vs. Cintas | Cass Information vs. RENTOKIL INITIAL ADR5 | Cass Information vs. INPOST SA EO | Cass Information vs. Elis SA |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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