Correlation Between Japan Steel and Cass Information
Can any of the company-specific risk be diversified away by investing in both Japan Steel 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 Japan Steel and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Japan Steel and Cass Information Systems, you can compare the effects of market volatilities on Japan Steel 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 Japan Steel with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Steel and Cass Information.
Diversification Opportunities for Japan Steel and Cass Information
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japan and Cass is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Japan Steel 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 Japan Steel 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 The Japan Steel 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 Japan Steel i.e., Japan Steel and Cass Information go up and down completely randomly.
Pair Corralation between Japan Steel and Cass Information
Assuming the 90 days horizon The Japan Steel is expected to under-perform the Cass Information. In addition to that, Japan Steel is 1.94 times more volatile than Cass Information Systems. It trades about -0.04 of its total potential returns per unit of risk. Cass Information Systems is currently generating about 0.12 per unit of volatility. If you would invest 3,840 in Cass Information Systems on November 7, 2024 and sell it today you would earn a total of 160.00 from holding Cass Information Systems or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Japan Steel vs. Cass Information Systems
Performance |
| Timeline |
| Japan Steel |
| Cass Information Systems |
Japan Steel and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Steel and Cass Information
The main advantage of trading using opposite Japan Steel and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Steel 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.| Japan Steel vs. COMPUTERSHARE | Japan Steel vs. MINCO SILVER | Japan Steel vs. MCEWEN MINING INC | Japan Steel vs. Perseus Mining Limited |
| Cass Information vs. SPARTAN STORES | Cass Information vs. COSTCO WHOLESALE CDR | Cass Information vs. CITIC Telecom International | Cass Information vs. Zoom Video Communications |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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