Correlation Between PPHE HOTEL and Caseys General
Can any of the company-specific risk be diversified away by investing in both PPHE HOTEL and Caseys General 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 PPHE HOTEL and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE HOTEL GROUP and Caseys General Stores, you can compare the effects of market volatilities on PPHE HOTEL and Caseys General 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 PPHE HOTEL with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE HOTEL and Caseys General.
Diversification Opportunities for PPHE HOTEL and Caseys General
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PPHE and Caseys is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PPHE HOTEL GROUP and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores and PPHE HOTEL 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 PPHE HOTEL GROUP are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of PPHE HOTEL i.e., PPHE HOTEL and Caseys General go up and down completely randomly.
Pair Corralation between PPHE HOTEL and Caseys General
Assuming the 90 days trading horizon PPHE HOTEL GROUP is expected to under-perform the Caseys General. In addition to that, PPHE HOTEL is 2.42 times more volatile than Caseys General Stores. It trades about -0.11 of its total potential returns per unit of risk. Caseys General Stores is currently generating about -0.15 per unit of volatility. If you would invest 38,800 in Caseys General Stores on October 20, 2024 and sell it today you would lose (1,000.00) from holding Caseys General Stores or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPHE HOTEL GROUP vs. Caseys General Stores
Performance |
| Timeline |
| PPHE HOTEL GROUP |
| Caseys General Stores |
PPHE HOTEL and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE HOTEL and Caseys General
The main advantage of trading using opposite PPHE HOTEL and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE HOTEL position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| PPHE HOTEL vs. PLAYWAY SA ZY 10 | PPHE HOTEL vs. USWE SPORTS AB | PPHE HOTEL vs. Alfa Financial Software | PPHE HOTEL vs. ePlay Digital |
| Caseys General vs. CVS Health | Caseys General vs. Take Two Interactive Software | Caseys General vs. MAGIC SOFTWARE ENTR | Caseys General vs. CARDINAL HEALTH |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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