Correlation Between Mader Group and Cass Information
Can any of the company-specific risk be diversified away by investing in both Mader Group 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 Mader Group and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mader Group Limited and Cass Information Systems, you can compare the effects of market volatilities on Mader Group 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 Mader Group with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mader Group and Cass Information.
Diversification Opportunities for Mader Group and Cass Information
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mader and Cass is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group 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 Mader Group 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 Mader Group 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 Mader Group i.e., Mader Group and Cass Information go up and down completely randomly.
Pair Corralation between Mader Group and Cass Information
Assuming the 90 days horizon Mader Group Limited is expected to generate 1.33 times more return on investment than Cass Information. However, Mader Group is 1.33 times more volatile than Cass Information Systems. It trades about 0.22 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.11 per unit of risk. If you would invest 357.00 in Mader Group Limited on November 9, 2024 and sell it today you would earn a total of 43.00 from holding Mader Group Limited or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mader Group Limited vs. Cass Information Systems
Performance |
| Timeline |
| Mader Group Limited |
| Cass Information Systems |
Mader Group and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mader Group and Cass Information
The main advantage of trading using opposite Mader Group and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mader Group 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.| Mader Group vs. Cintas | Mader Group vs. Thomson Reuters Corp | Mader Group vs. Global Payments | Mader Group vs. Wolters Kluwer NV |
| Cass Information vs. First Advantage Corp | Cass Information vs. Rentokil Initial PLC | Cass Information vs. CBIZ Inc | Cass Information vs. Civeo Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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