Correlation Between Canadian Utilities and Cass Information
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Cass Information 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 Canadian Utilities and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Cass Information Systems, you can compare the effects of market volatilities on Canadian Utilities and Cass Information 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 Canadian Utilities with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Cass Information.
Diversification Opportunities for Canadian Utilities and Cass Information
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Cass is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems and Canadian Utilities 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 Canadian Utilities Limited are associated (or correlated) with Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Cass Information go up and down completely randomly.
Pair Corralation between Canadian Utilities and Cass Information
Assuming the 90 days horizon Canadian Utilities is expected to generate 1.47 times less return on investment than Cass Information. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.59 times less risky than Cass Information. It trades about 0.18 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,920 in Cass Information Systems on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Cass Information Systems or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Cass Information Systems
Performance |
| Timeline |
| Canadian Utilities |
| Cass Information Systems |
Canadian Utilities and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Cass Information
The main advantage of trading using opposite Canadian Utilities and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| Canadian Utilities vs. ATRESMEDIA | Canadian Utilities vs. Lamar Advertising | Canadian Utilities vs. CARSALESCOM | Canadian Utilities vs. PLAYTIKA HOLDING DL 01 |
| Cass Information vs. MTI WIRELESS EDGE | Cass Information vs. PKSHA TECHNOLOGY INC | Cass Information vs. MACOM Technology Solutions | Cass Information vs. NURAN WIRELESS INC |
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.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |