Correlation Between Caseys General and Maison Solutions
Can any of the company-specific risk be diversified away by investing in both Caseys General and Maison Solutions 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 Caseys General and Maison Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Maison Solutions, you can compare the effects of market volatilities on Caseys General and Maison Solutions 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 Caseys General with a short position of Maison Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Maison Solutions.
Diversification Opportunities for Caseys General and Maison Solutions
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and Maison is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Maison Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maison Solutions and Caseys General 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 Caseys General Stores are associated (or correlated) with Maison Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maison Solutions has no effect on the direction of Caseys General i.e., Caseys General and Maison Solutions go up and down completely randomly.
Pair Corralation between Caseys General and Maison Solutions
Given the investment horizon of 90 days Caseys General is expected to generate 3.21 times less return on investment than Maison Solutions. But when comparing it to its historical volatility, Caseys General Stores is 6.0 times less risky than Maison Solutions. It trades about 0.1 of its potential returns per unit of risk. Maison Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Maison Solutions on November 9, 2024 and sell it today you would earn a total of 29.00 from holding Maison Solutions or generate 33.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Maison Solutions
Performance |
| Timeline |
| Caseys General Stores |
| Maison Solutions |
Caseys General and Maison Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Maison Solutions
The main advantage of trading using opposite Caseys General and Maison Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Maison Solutions 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 Maison Solutions will offset losses from the drop in Maison Solutions' long position.| Caseys General vs. Leslies | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General vs. 1 800 FLOWERSCOM |
| Maison Solutions vs. Q2 Holdings | Maison Solutions vs. Life360, Common Stock | Maison Solutions vs. Insteel Industries | Maison Solutions vs. Joint Stock |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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