Correlation Between Cass Information and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Cass Information and Evolution Mining 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 Evolution Mining 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 Evolution Mining Limited, you can compare the effects of market volatilities on Cass Information and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Evolution Mining.
Diversification Opportunities for Cass Information and Evolution Mining
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cass and Evolution is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Evolution Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Cass Information i.e., Cass Information and Evolution Mining go up and down completely randomly.
Pair Corralation between Cass Information and Evolution Mining
Assuming the 90 days horizon Cass Information Systems is expected to generate 1.11 times more return on investment than Evolution Mining. However, Cass Information is 1.11 times more volatile than Evolution Mining Limited. It trades about 0.16 of its potential returns per unit of risk. Evolution Mining Limited is currently generating about -0.05 per unit of risk. If you would invest 3,960 in Cass Information Systems on August 31, 2024 and sell it today you would earn a total of 280.00 from holding Cass Information Systems or generate 7.07% 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. Evolution Mining Limited
Performance |
| Timeline |
| Cass Information Systems |
| Evolution Mining |
Cass Information and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Evolution Mining
The main advantage of trading using opposite Cass Information and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining's long position.| Cass Information vs. Singapore Telecommunications Limited | Cass Information vs. SBA Communications Corp | Cass Information vs. Tower One Wireless | Cass Information vs. Verizon Communications |
| Evolution Mining vs. Cass Information Systems | Evolution Mining vs. MICRONIC MYDATA | Evolution Mining vs. Check Point Software | Evolution Mining vs. TELES Informationstechnologien AG |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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