Correlation Between Republic Services and Cass Information
Can any of the company-specific risk be diversified away by investing in both Republic Services 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 Republic Services and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Republic Services and Cass Information Systems, you can compare the effects of market volatilities on Republic Services 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 Republic Services with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Republic Services and Cass Information.
Diversification Opportunities for Republic Services and Cass Information
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Republic and Cass is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Republic Services 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 Republic Services 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 Republic Services 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 Republic Services i.e., Republic Services and Cass Information go up and down completely randomly.
Pair Corralation between Republic Services and Cass Information
Considering the 90-day investment horizon Republic Services is expected to generate 0.46 times more return on investment than Cass Information. However, Republic Services is 2.17 times less risky than Cass Information. It trades about 0.13 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.03 per unit of risk. If you would invest 18,247 in Republic Services on August 24, 2024 and sell it today you would earn a total of 3,159 from holding Republic Services or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Republic Services vs. Cass Information Systems
Performance |
| Timeline |
| Republic Services |
| Cass Information Systems |
Republic Services and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Republic Services and Cass Information
The main advantage of trading using opposite Republic Services and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Republic Services 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.| Republic Services vs. Pro Dex | Republic Services vs. Pure Cycle | Republic Services vs. Quest Resource Holding | Republic Services vs. ABIVAX Socit Anonyme |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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