Correlation Between Tradegate and Cass Information
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Cass Information Systems, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Cass Information.
Diversification Opportunities for Tradegate and Cass Information
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tradegate and Cass is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Cass Information go up and down completely randomly.
Pair Corralation between Tradegate and Cass Information
Assuming the 90 days horizon Tradegate is expected to generate 54.84 times less return on investment than Cass Information. But when comparing it to its historical volatility, Tradegate AG Wertpapierhandelsbank is 2.06 times less risky than Cass Information. It trades about 0.0 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,673 in Cass Information Systems on September 12, 2024 and sell it today you would earn a total of 467.00 from holding Cass Information Systems or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Cass Information Systems
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Cass Information Systems |
Tradegate and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Cass Information
The main advantage of trading using opposite Tradegate and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
| Cass Information vs. Tradegate AG Wertpapierhandelsbank | Cass Information vs. Guidewire Software | Cass Information vs. PT Bank Maybank | Cass Information vs. REVO INSURANCE SPA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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