Correlation Between Caseys General and ODP Corp
Can any of the company-specific risk be diversified away by investing in both Caseys General and ODP Corp 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 ODP Corp 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 ODP Corp, you can compare the effects of market volatilities on Caseys General and ODP Corp 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 ODP Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and ODP Corp.
Diversification Opportunities for Caseys General and ODP Corp
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and ODP is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and ODP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP Corp 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 ODP Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP Corp has no effect on the direction of Caseys General i.e., Caseys General and ODP Corp go up and down completely randomly.
Pair Corralation between Caseys General and ODP Corp
Given the investment horizon of 90 days Caseys General Stores is expected to generate 0.56 times more return on investment than ODP Corp. However, Caseys General Stores is 1.8 times less risky than ODP Corp. It trades about 0.1 of its potential returns per unit of risk. ODP Corp is currently generating about -0.09 per unit of risk. If you would invest 30,331 in Caseys General Stores on August 27, 2024 and sell it today you would earn a total of 12,457 from holding Caseys General Stores or generate 41.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. ODP Corp
Performance |
| Timeline |
| Caseys General Stores |
| ODP Corp |
Caseys General and ODP Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and ODP Corp
The main advantage of trading using opposite Caseys General and ODP Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, ODP Corp 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 ODP Corp will offset losses from the drop in ODP Corp's long position.| Caseys General vs. Leslies | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General vs. 1 800 FLOWERSCOM |
| ODP Corp vs. Leslies | ODP Corp vs. Sally Beauty Holdings | ODP Corp vs. 1 800 FLOWERSCOM | ODP Corp vs. Caseys General Stores |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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