Correlation Between Caseys General and Air Lease
Can any of the company-specific risk be diversified away by investing in both Caseys General and Air Lease 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 Air Lease 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 Air Lease, you can compare the effects of market volatilities on Caseys General and Air Lease 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 Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Air Lease.
Diversification Opportunities for Caseys General and Air Lease
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caseys and Air is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Caseys General i.e., Caseys General and Air Lease go up and down completely randomly.
Pair Corralation between Caseys General and Air Lease
Assuming the 90 days trading horizon Caseys General is expected to generate 1.76 times less return on investment than Air Lease. In addition to that, Caseys General is 1.01 times more volatile than Air Lease. It trades about 0.21 of its total potential returns per unit of risk. Air Lease is currently generating about 0.37 per unit of volatility. If you would invest 4,040 in Air Lease on September 1, 2024 and sell it today you would earn a total of 720.00 from holding Air Lease or generate 17.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Air Lease
Performance |
| Timeline |
| Caseys General Stores |
| Air Lease |
Caseys General and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Air Lease
The main advantage of trading using opposite Caseys General and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Air Lease vs. Caseys General Stores | Air Lease vs. Ping An Insurance | Air Lease vs. Selective Insurance Group | Air Lease vs. The Hanover Insurance |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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