Correlation Between System1 and Cass Information
Can any of the company-specific risk be diversified away by investing in both System1 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 System1 and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System1 and Cass Information Systems, you can compare the effects of market volatilities on System1 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 System1 with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of System1 and Cass Information.
Diversification Opportunities for System1 and Cass Information
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between System1 and Cass is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding System1 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 System1 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 System1 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 System1 i.e., System1 and Cass Information go up and down completely randomly.
Pair Corralation between System1 and Cass Information
Considering the 90-day investment horizon System1 is expected to generate 2.41 times less return on investment than Cass Information. In addition to that, System1 is 2.72 times more volatile than Cass Information Systems. It trades about 0.02 of its total potential returns per unit of risk. Cass Information Systems is currently generating about 0.16 per unit of volatility. If you would invest 4,254 in Cass Information Systems on September 4, 2024 and sell it today you would earn a total of 263.00 from holding Cass Information Systems or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
System1 vs. Cass Information Systems
Performance |
| Timeline |
| System1 |
| Cass Information Systems |
System1 and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System1 and Cass Information
The main advantage of trading using opposite System1 and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System1 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.| System1 vs. Network 1 Technologies | System1 vs. Maximus | System1 vs. First Advantage Corp | System1 vs. Civeo Corp |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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