Correlation Between Global Payments and Cass Information

Can any of the company-specific risk be diversified away by investing in both Global Payments and Cass Information 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 Global Payments and Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Payments and Cass Information Systems, you can compare the effects of market volatilities on Global Payments and Cass Information 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 Global Payments with a short position of Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Payments and Cass Information.

Diversification Opportunities for Global Payments and Cass Information

0.32

Correlation Coefficient

Global Payments  Cass Information

Weak diversification

The 3 months correlation between Global and Cass is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Global Payments and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems and Global Payments 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 Global Payments are associated (or correlated) with Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of Global Payments i.e., Global Payments and Cass Information go up and down completely randomly.

Pair Corralation between Global Payments and Cass Information

Considering the 90-day investment horizon Global Payments is expected to generate 1.36 times more return on investment than Cass Information. However, Global Payments is 1.36 times more volatile than Cass Information Systems. It trades about 0.01 of its potential returns per unit of risk. Cass Information Systems is currently generating about -0.03 per unit of risk. If you would invest  7,903  in Global Payments on May 6, 2025 and sell it today you would lose (45.00) from holding Global Payments or give up 0.57% of portfolio value over 90 days.

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

Global Payments  vs.  Cass Information Systems

Global Payments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Payments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Global Payments is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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. In spite of comparatively stable basic indicators, Cass Information is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Payments and Cass Information

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

The idea behind Global Payments and Cass Information Systems 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .