Correlation Between Cass Information and CrowdStrike Holdings
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cass Information Systems vs. CrowdStrike Holdings
Performance |
Timeline |
Cass Information Systems |
CrowdStrike Holdings |
Cass Information and CrowdStrike Holdings Volatility Contrast
Predicted Return Density |
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.Cass Information vs. KAUFMAN ET BROAD | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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