Correlation Between Caseys General and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Caseys General and Burlington Stores 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 Burlington Stores 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 Burlington Stores, you can compare the effects of market volatilities on Caseys General and Burlington Stores 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 Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Burlington Stores.
Diversification Opportunities for Caseys General and Burlington Stores
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and Burlington is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores 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 Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of Caseys General i.e., Caseys General and Burlington Stores go up and down completely randomly.
Pair Corralation between Caseys General and Burlington Stores
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.7 times more return on investment than Burlington Stores. However, Caseys General Stores is 1.42 times less risky than Burlington Stores. It trades about 0.09 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.03 per unit of risk. If you would invest 19,651 in Caseys General Stores on December 1, 2024 and sell it today you would earn a total of 19,349 from holding Caseys General Stores or generate 98.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Burlington Stores
Performance |
| Timeline |
| Caseys General Stores |
| Burlington Stores |
Caseys General and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Burlington Stores
The main advantage of trading using opposite Caseys General and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| Caseys General vs. PLANT VEDA FOODS | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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