Correlation Between Cass Information and M/I Homes

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

Diversification Opportunities for Cass Information and M/I Homes

0.62

Correlation Coefficient

Cass Information  M/I Homes

Poor diversification

The 3 months correlation between Cass and M/I is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M/I Homes 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 M/I Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M/I Homes has no effect on the direction of Cass Information i.e., Cass Information and M/I Homes go up and down completely randomly.

Pair Corralation between Cass Information and M/I Homes

Assuming the 90 days horizon Cass Information Systems is expected to generate 0.62 times more return on investment than M/I Homes. However, Cass Information Systems is 1.61 times less risky than M/I Homes. It trades about 0.11 of its potential returns per unit of risk. MI Homes is currently generating about 0.02 per unit of risk. If you would invest  3,514  in Cass Information Systems on April 23, 2025 and sell it today you would earn a total of  326.00  from holding Cass Information Systems or generate 9.28% return on investment over 90 days.

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

Cass Information Systems  vs.  MI Homes

Cass Information Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cass Information Systems are ranked lower than 8 (%) 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 August 2025.

M/I Homes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MI Homes are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, M/I Homes is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cass Information and M/I Homes

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

The idea behind Cass Information Systems and MI Homes 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.