Correlation Between Cass Information and Waste Management
Can any of the company-specific risk be diversified away by investing in both Cass Information and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on Cass Information and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Waste Management.
Diversification Opportunities for Cass Information and Waste Management
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cass and Waste is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Cass Information i.e., Cass Information and Waste Management go up and down completely randomly.
Pair Corralation between Cass Information and Waste Management
Assuming the 90 days horizon Cass Information is expected to generate 1.14 times less return on investment than Waste Management. In addition to that, Cass Information is 1.58 times more volatile than Waste Management. It trades about 0.05 of its total potential returns per unit of risk. Waste Management is currently generating about 0.09 per unit of volatility. If you would invest 14,937 in Waste Management on August 29, 2024 and sell it today you would earn a total of 6,788 from holding Waste Management or generate 45.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Waste Management
Performance |
| Timeline |
| Cass Information Systems |
| Waste Management |
Cass Information and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Waste Management
The main advantage of trading using opposite Cass Information and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| Cass Information vs. JJ SNACK FOODS | Cass Information vs. CN MODERN DAIRY | Cass Information vs. AUST AGRICULTURAL | Cass Information vs. AUSNUTRIA DAIRY |
| Waste Management vs. Singapore Reinsurance | Waste Management vs. SEKISUI CHEMICAL | Waste Management vs. Universal Insurance Holdings | Waste Management vs. MYFAIR GOLD P |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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