Correlation Between Caseys General and Murphy USA
Can any of the company-specific risk be diversified away by investing in both Caseys General and Murphy USA 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 Murphy USA 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 Murphy USA, you can compare the effects of market volatilities on Caseys General and Murphy USA 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 Murphy USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Murphy USA.
Diversification Opportunities for Caseys General and Murphy USA
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Caseys and Murphy is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Murphy USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy USA 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 Murphy USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy USA has no effect on the direction of Caseys General i.e., Caseys General and Murphy USA go up and down completely randomly.
Pair Corralation between Caseys General and Murphy USA
Given the investment horizon of 90 days Caseys General Stores is expected to generate 1.19 times more return on investment than Murphy USA. However, Caseys General is 1.19 times more volatile than Murphy USA. It trades about 0.1 of its potential returns per unit of risk. Murphy USA is currently generating about 0.11 per unit of risk. If you would invest 27,790 in Caseys General Stores on August 24, 2024 and sell it today you would earn a total of 13,850 from holding Caseys General Stores or generate 49.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Murphy USA
Performance |
| Timeline |
| Caseys General Stores |
| Murphy USA |
Caseys General and Murphy USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Murphy USA
The main advantage of trading using opposite Caseys General and Murphy USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Murphy USA 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 Murphy USA will offset losses from the drop in Murphy USA's long position.| Caseys General vs. Leslies | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General vs. 1 800 FLOWERSCOM |
| Murphy USA vs. Group 1 Automotive | Murphy USA vs. Murphy Oil | Murphy USA vs. LCI Industries | Murphy USA vs. Penske Automotive Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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