Correlation Between Cass Information and Wolters Kluwers

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

Diversification Opportunities for Cass Information and Wolters Kluwers

-0.03

Correlation Coefficient

Cass Information  Wolters Kluwers

Good diversification

The 3 months correlation between Cass and Wolters is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Wolters Kluwers Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolters Kluwers Nv 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 Wolters Kluwers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolters Kluwers Nv has no effect on the direction of Cass Information i.e., Cass Information and Wolters Kluwers go up and down completely randomly.

Pair Corralation between Cass Information and Wolters Kluwers

Assuming the 90 days horizon Cass Information Systems is expected to generate 0.89 times more return on investment than Wolters Kluwers. However, Cass Information Systems is 1.13 times less risky than Wolters Kluwers. It trades about 0.0 of its potential returns per unit of risk. Wolters Kluwers Nv is currently generating about -0.1 per unit of risk. If you would invest  3,992  in Cass Information Systems on December 21, 2024 and sell it today you would lose (32.00) from holding Cass Information Systems or give up 0.8% 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.  Wolters Kluwers Nv

Cass Information Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cass Information Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cass Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Wolters Kluwers Nv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wolters Kluwers Nv has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Cass Information and Wolters Kluwers

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

The idea behind Cass Information Systems and Wolters Kluwers Nv 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.