Correlation Between Cass Information and Quest Resource

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

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

Diversification Opportunities for Cass Information and Quest Resource

-0.24

Correlation Coefficient

Cass Information  Quest Resource

Very good diversification

The 3 months correlation between Cass and Quest is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Quest Resource Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quest Resource Holding and Cass Information 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 Cass Information Systems are associated (or correlated) with Quest Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quest Resource Holding has no effect on the direction of Cass Information i.e., Cass Information and Quest Resource go up and down completely randomly.

Pair Corralation between Cass Information and Quest Resource

Given the investment horizon of 90 days Cass Information Systems is expected to under-perform the Quest Resource. But the stock apears to be less risky and, when comparing its historical volatility, Cass Information Systems is 1.46 times less risky than Quest Resource. The stock trades about -0.01 of its potential returns per unit of risk. The Quest Resource Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  722.00  in Quest Resource Holding on October 6, 2024 and sell it today you would lose (79.00) from holding Quest Resource Holding or give up 10.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cass Information Systems  vs.  Quest Resource Holding

Cass Information Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cass Information Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cass Information is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Quest Resource Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quest Resource Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cass Information and Quest Resource

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

The idea behind Cass Information Systems and Quest Resource Holding 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.