Correlation Between Caseys General and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Caseys General and SWISS WATER 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Caseys General and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and SWISS WATER.
Diversification Opportunities for Caseys General and SWISS WATER
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caseys and SWISS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Caseys General i.e., Caseys General and SWISS WATER go up and down completely randomly.
Pair Corralation between Caseys General and SWISS WATER
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.4 times more return on investment than SWISS WATER. However, Caseys General Stores is 2.5 times less risky than SWISS WATER. It trades about 0.01 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about -0.11 per unit of risk. If you would invest 37,800 in Caseys General Stores on October 19, 2024 and sell it today you would earn a total of 0.00 from holding Caseys General Stores or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Caseys General Stores |
| SWISS WATER DECAFFCOFFEE |
Caseys General and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and SWISS WATER
The main advantage of trading using opposite Caseys General and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Caseys General vs. The Trade Desk | Caseys General vs. NTG Nordic Transport | Caseys General vs. CARSALESCOM | Caseys General vs. BII Railway Transportation |
| SWISS WATER vs. COSTCO WHOLESALE CDR | SWISS WATER vs. Apollo Investment Corp | SWISS WATER vs. HK Electric Investments | SWISS WATER 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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