Correlation Between Caseys General and Japan Post
Can any of the company-specific risk be diversified away by investing in both Caseys General and Japan Post 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 Japan Post 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 Japan Post Bank, you can compare the effects of market volatilities on Caseys General and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Japan Post.
Diversification Opportunities for Caseys General and Japan Post
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caseys and Japan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Japan Post Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Bank 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Bank has no effect on the direction of Caseys General i.e., Caseys General and Japan Post go up and down completely randomly.
Pair Corralation between Caseys General and Japan Post
Assuming the 90 days trading horizon Caseys General Stores is expected to under-perform the Japan Post. But the stock apears to be less risky and, when comparing its historical volatility, Caseys General Stores is 1.77 times less risky than Japan Post. The stock trades about -0.19 of its potential returns per unit of risk. The Japan Post Bank is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 870.00 in Japan Post Bank on October 23, 2024 and sell it today you would earn a total of 65.00 from holding Japan Post Bank or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Japan Post Bank
Performance |
| Timeline |
| Caseys General Stores |
| Japan Post Bank |
Caseys General and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Japan Post
The main advantage of trading using opposite Caseys General and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| Caseys General vs. IMPERIAL TOBACCO | Caseys General vs. FARM 51 GROUP | Caseys General vs. AGRICULTBK HADR25 YC | Caseys General vs. JAPAN TOBACCO UNSPADR12 |
| Japan Post vs. Caseys General Stores | Japan Post vs. CarsalesCom | Japan Post vs. COMPUTERSHARE | Japan Post vs. INTERNET INJPADR 1 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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