Correlation Between Cass Information and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Cass Information and Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline Corp, you can compare the effects of market volatilities on Cass Information and Pembina Pipeline 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 Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Pembina Pipeline.
Diversification Opportunities for Cass Information and Pembina Pipeline
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cass and Pembina is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp 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 Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Cass Information i.e., Cass Information and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Cass Information and Pembina Pipeline
Assuming the 90 days horizon Cass Information Systems is expected to generate 0.76 times more return on investment than Pembina Pipeline. However, Cass Information Systems is 1.32 times less risky than Pembina Pipeline. It trades about -0.14 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.14 per unit of risk. If you would invest 4,309 in Cass Information Systems on September 13, 2024 and sell it today you would lose (149.00) from holding Cass Information Systems or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Cass Information Systems |
| Pembina Pipeline Corp |
Cass Information and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Pembina Pipeline
The main advantage of trading using opposite Cass Information and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| Cass Information vs. Tradegate AG Wertpapierhandelsbank | Cass Information vs. Guidewire Software | Cass Information vs. PT Bank Maybank | Cass Information vs. REVO INSURANCE SPA |
| Pembina Pipeline vs. TC Energy | Pembina Pipeline vs. Superior Plus Corp | Pembina Pipeline vs. SIVERS SEMICONDUCTORS AB | Pembina Pipeline vs. NorAm Drilling AS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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