Correlation Between Casa Systems and EchoStar

Can any of the company-specific risk be diversified away by investing in both Casa Systems and EchoStar 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 Casa Systems and EchoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Casa Systems and EchoStar, you can compare the effects of market volatilities on Casa Systems and EchoStar 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 Casa Systems with a short position of EchoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casa Systems and EchoStar.

Diversification Opportunities for Casa Systems and EchoStar

0.0

Correlation Coefficient

Casa Systems  EchoStar

Pay attention - limited upside

The 3 months correlation between Casa and EchoStar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Casa Systems and EchoStar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EchoStar and Casa Systems 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 Casa Systems are associated (or correlated) with EchoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EchoStar has no effect on the direction of Casa Systems i.e., Casa Systems and EchoStar go up and down completely randomly.

Pair Corralation between Casa Systems and EchoStar

If you would invest  2,301  in EchoStar on December 28, 2024 and sell it today you would earn a total of  198.00  from holding EchoStar or generate 8.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Casa Systems  vs.  EchoStar

Casa Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Casa Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Casa Systems is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

EchoStar

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EchoStar are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, EchoStar may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Casa Systems and EchoStar

The main advantage of trading using opposite Casa Systems and EchoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casa Systems position performs unexpectedly, EchoStar 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 EchoStar will offset losses from the drop in EchoStar's long position.

The idea behind Casa Systems and EchoStar pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.