Correlation Between Caseys General and UNIVERSAL MUSIC
Can any of the company-specific risk be diversified away by investing in both Caseys General and UNIVERSAL MUSIC 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 UNIVERSAL MUSIC 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 UNIVERSAL MUSIC GROUP, you can compare the effects of market volatilities on Caseys General and UNIVERSAL MUSIC 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 UNIVERSAL MUSIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and UNIVERSAL MUSIC.
Diversification Opportunities for Caseys General and UNIVERSAL MUSIC
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and UNIVERSAL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and UNIVERSAL MUSIC GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL MUSIC GROUP 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 UNIVERSAL MUSIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVERSAL MUSIC GROUP has no effect on the direction of Caseys General i.e., Caseys General and UNIVERSAL MUSIC go up and down completely randomly.
Pair Corralation between Caseys General and UNIVERSAL MUSIC
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 1.58 times more return on investment than UNIVERSAL MUSIC. However, Caseys General is 1.58 times more volatile than UNIVERSAL MUSIC GROUP. It trades about 0.35 of its potential returns per unit of risk. UNIVERSAL MUSIC GROUP is currently generating about -0.12 per unit of risk. If you would invest 34,800 in Caseys General Stores on September 4, 2024 and sell it today you would earn a total of 5,200 from holding Caseys General Stores or generate 14.94% 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. UNIVERSAL MUSIC GROUP
Performance |
| Timeline |
| Caseys General Stores |
| UNIVERSAL MUSIC GROUP |
Caseys General and UNIVERSAL MUSIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and UNIVERSAL MUSIC
The main advantage of trading using opposite Caseys General and UNIVERSAL MUSIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, UNIVERSAL MUSIC 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 UNIVERSAL MUSIC will offset losses from the drop in UNIVERSAL MUSIC's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| UNIVERSAL MUSIC vs. Adtalem Global Education | UNIVERSAL MUSIC vs. Tradeweb Markets | UNIVERSAL MUSIC vs. INTER CARS SA | UNIVERSAL MUSIC vs. RETAIL FOOD 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |