Correlation Between Caseys General and NEXON Co
Can any of the company-specific risk be diversified away by investing in both Caseys General and NEXON Co 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 NEXON Co 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 NEXON Co, you can compare the effects of market volatilities on Caseys General and NEXON Co 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 NEXON Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and NEXON Co.
Diversification Opportunities for Caseys General and NEXON Co
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caseys and NEXON is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON Co 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 NEXON Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON Co has no effect on the direction of Caseys General i.e., Caseys General and NEXON Co go up and down completely randomly.
Pair Corralation between Caseys General and NEXON Co
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.51 times more return on investment than NEXON Co. However, Caseys General Stores is 1.97 times less risky than NEXON Co. It trades about 0.07 of its potential returns per unit of risk. NEXON Co is currently generating about 0.0 per unit of risk. If you would invest 26,410 in Caseys General Stores on December 12, 2024 and sell it today you would earn a total of 9,790 from holding Caseys General Stores or generate 37.07% 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. NEXON Co
Performance |
| Timeline |
| Caseys General Stores |
| NEXON Co |
Caseys General and NEXON Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and NEXON Co
The main advantage of trading using opposite Caseys General and NEXON Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, NEXON Co 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 NEXON Co will offset losses from the drop in NEXON Co's long position.| Caseys General vs. AGRICULTBK HADR25 YC | ||
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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