Correlation Between Cass Information and Boiron SA

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

Diversification Opportunities for Cass Information and Boiron SA

-0.6

Correlation Coefficient

Cass Information  Boiron SA

Excellent diversification

The 3 months correlation between Cass and Boiron is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron SA 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Cass Information i.e., Cass Information and Boiron SA go up and down completely randomly.

Pair Corralation between Cass Information and Boiron SA

Assuming the 90 days horizon Cass Information Systems is expected to under-perform the Boiron SA. In addition to that, Cass Information is 1.02 times more volatile than Boiron SA. It trades about -0.31 of its total potential returns per unit of risk. Boiron SA is currently generating about 0.05 per unit of volatility. If you would invest  2,630  in Boiron SA on October 8, 2024 and sell it today you would earn a total of  20.00  from holding Boiron SA or generate 0.76% return on investment over 90 days.

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

Cass Information Systems  vs.  Boiron SA

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 fragile basic indicators, Cass Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Boiron SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boiron SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cass Information and Boiron SA

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

The idea behind Cass Information Systems and Boiron SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..