Correlation Between Caseys General and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both Caseys General and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on Caseys General and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and DATANG INTL.
Diversification Opportunities for Caseys General and DATANG INTL
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and DATANG is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of Caseys General i.e., Caseys General and DATANG INTL go up and down completely randomly.
Pair Corralation between Caseys General and DATANG INTL
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.29 times more return on investment than DATANG INTL. However, Caseys General Stores is 3.42 times less risky than DATANG INTL. It trades about 0.18 of its potential returns per unit of risk. DATANG INTL POW is currently generating about 0.02 per unit of risk. If you would invest 38,400 in Caseys General Stores on November 1, 2024 and sell it today you would earn a total of 1,600 from holding Caseys General Stores or generate 4.17% 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. DATANG INTL POW
Performance |
| Timeline |
| Caseys General Stores |
| DATANG INTL POW |
Caseys General and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and DATANG INTL
The main advantage of trading using opposite Caseys General and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.| Caseys General vs. CHRYSALIS INVESTMENTS LTD | Caseys General vs. Zijin Mining Group | Caseys General vs. ECHO INVESTMENT ZY | Caseys General vs. SLR Investment Corp |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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