Correlation Between Cass Information and CrowdStrike Holdings

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Can any of the company-specific risk be diversified away by investing in both Cass Information and CrowdStrike Holdings 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 CrowdStrike Holdings 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 CrowdStrike Holdings, you can compare the effects of market volatilities on Cass Information and CrowdStrike Holdings 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 CrowdStrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and CrowdStrike Holdings.

Diversification Opportunities for Cass Information and CrowdStrike Holdings

CassCrowdStrikeDiversified AwayCassCrowdStrikeDiversified Away100%
0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cass and CrowdStrike is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and CrowdStrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrowdStrike Holdings 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 CrowdStrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrowdStrike Holdings has no effect on the direction of Cass Information i.e., Cass Information and CrowdStrike Holdings go up and down completely randomly.

Pair Corralation between Cass Information and CrowdStrike Holdings

Assuming the 90 days horizon Cass Information is expected to generate 11.13 times less return on investment than CrowdStrike Holdings. But when comparing it to its historical volatility, Cass Information Systems is 1.88 times less risky than CrowdStrike Holdings. It trades about 0.02 of its potential returns per unit of risk. CrowdStrike Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  34,595  in CrowdStrike Holdings on November 24, 2024 and sell it today you would earn a total of  6,935  from holding CrowdStrike Holdings or generate 20.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cass Information Systems  vs.  CrowdStrike Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-505
JavaScript chart by amCharts 3.21.15CC3 45C
       Timeline  
Cass Information Systems 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cass Information Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Cass Information is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb383940414243
CrowdStrike Holdings 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CrowdStrike Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CrowdStrike Holdings reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb320340360380400420440

Cass Information and CrowdStrike Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.59-3.44-2.29-1.130.01.132.33.474.635.8 0.050.100.15
JavaScript chart by amCharts 3.21.15CC3 45C
       Returns  

Pair Trading with Cass Information and CrowdStrike Holdings

The main advantage of trading using opposite Cass Information and CrowdStrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, CrowdStrike Holdings 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 CrowdStrike Holdings will offset losses from the drop in CrowdStrike Holdings' long position.
The idea behind Cass Information Systems and CrowdStrike Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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