Correlation Between Cass Information and BANKINTER ADR

Can any of the company-specific risk be diversified away by investing in both Cass Information and BANKINTER ADR 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 BANKINTER ADR 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 BANKINTER ADR 2007, you can compare the effects of market volatilities on Cass Information and BANKINTER ADR 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 BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and BANKINTER ADR.

Diversification Opportunities for Cass Information and BANKINTER ADR

0.49

Correlation Coefficient

Cass Information  BANKINTER ADR

Very weak diversification

The 3 months correlation between Cass and BANKINTER is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 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 BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of Cass Information i.e., Cass Information and BANKINTER ADR go up and down completely randomly.

Pair Corralation between Cass Information and BANKINTER ADR

Assuming the 90 days horizon Cass Information Systems is expected to under-perform the BANKINTER ADR. But the stock apears to be less risky and, when comparing its historical volatility, Cass Information Systems is 1.13 times less risky than BANKINTER ADR. The stock trades about -0.34 of its potential returns per unit of risk. The BANKINTER ADR 2007 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  725.00  in BANKINTER ADR 2007 on October 6, 2024 and sell it today you would earn a total of  0.00  from holding BANKINTER ADR 2007 or generate 0.0% return on investment over 90 days.

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

Cass Information Systems  vs.  BANKINTER ADR 2007

Cass Information Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cass Information Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Cass Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BANKINTER ADR 2007

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BANKINTER ADR 2007 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BANKINTER ADR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cass Information and BANKINTER ADR

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

The idea behind Cass Information Systems and BANKINTER ADR 2007 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.