Correlation Between Imperial Metals and Cass Information
Can any of the company-specific risk be diversified away by investing in both Imperial Metals 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 Imperial Metals and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and Cass Information Systems, you can compare the effects of market volatilities on Imperial Metals 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 Imperial Metals with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Cass Information.
Diversification Opportunities for Imperial Metals and Cass Information
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Imperial and Cass is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals 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 Imperial Metals 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 Imperial Metals 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 Imperial Metals i.e., Imperial Metals and Cass Information go up and down completely randomly.
Pair Corralation between Imperial Metals and Cass Information
Assuming the 90 days horizon Imperial Metals is expected to generate 1.68 times more return on investment than Cass Information. However, Imperial Metals is 1.68 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 -0.1 per unit of risk. If you would invest 128.00 in Imperial Metals on October 22, 2024 and sell it today you would lose (2.00) from holding Imperial Metals or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. Cass Information Systems
Performance |
| Timeline |
| Imperial Metals |
| Cass Information Systems |
Imperial Metals and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and Cass Information
The main advantage of trading using opposite Imperial Metals and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals 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.| Imperial Metals vs. Nippon Steel | Imperial Metals vs. LIFENET INSURANCE CO | Imperial Metals vs. BlueScope Steel Limited | Imperial Metals vs. MOUNT GIBSON IRON |
| Cass Information vs. Rocket Internet SE | Cass Information vs. UNIVERSAL MUSIC GROUP | Cass Information vs. Air Transport Services | Cass Information vs. Fortescue Metals Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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