Correlation Between Caseys General and AIB Group
Can any of the company-specific risk be diversified away by investing in both Caseys General and AIB Group 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 AIB Group 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 AIB Group plc, you can compare the effects of market volatilities on Caseys General and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and AIB Group.
Diversification Opportunities for Caseys General and AIB Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caseys and AIB is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and AIB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group plc 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group plc has no effect on the direction of Caseys General i.e., Caseys General and AIB Group go up and down completely randomly.
Pair Corralation between Caseys General and AIB Group
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.62 times more return on investment than AIB Group. However, Caseys General Stores is 1.62 times less risky than AIB Group. It trades about 0.11 of its potential returns per unit of risk. AIB Group plc is currently generating about 0.04 per unit of risk. If you would invest 22,230 in Caseys General Stores on August 29, 2024 and sell it today you would earn a total of 17,170 from holding Caseys General Stores or generate 77.24% 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. AIB Group plc
Performance |
| Timeline |
| Caseys General Stores |
| AIB Group plc |
Caseys General and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and AIB Group
The main advantage of trading using opposite Caseys General and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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