Correlation Between Data Modul and Cass Information
Can any of the company-specific risk be diversified away by investing in both Data Modul 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 Data Modul and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Data Modul AG and Cass Information Systems, you can compare the effects of market volatilities on Data Modul 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 Data Modul with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Data Modul and Cass Information.
Diversification Opportunities for Data Modul and Cass Information
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Data and Cass is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Data Modul AG 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 Data Modul 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 Data Modul AG 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 Data Modul i.e., Data Modul and Cass Information go up and down completely randomly.
Pair Corralation between Data Modul and Cass Information
Assuming the 90 days trading horizon Data Modul AG is expected to generate 2.53 times more return on investment than Cass Information. However, Data Modul is 2.53 times more volatile than Cass Information Systems. It trades about -0.01 of its potential returns per unit of risk. Cass Information Systems is currently generating about -0.12 per unit of risk. If you would invest 2,460 in Data Modul AG on December 30, 2024 and sell it today you would lose (40.00) from holding Data Modul AG or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Data Modul AG vs. Cass Information Systems
Performance |
| Timeline |
| Data Modul AG |
| Cass Information Systems |
Data Modul and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Data Modul and Cass Information
The main advantage of trading using opposite Data Modul and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Data Modul 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.| Data Modul vs. SPORT LISBOA E | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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