Correlation Between Caseys General and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Caseys General and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL BANK, you can compare the effects of market volatilities on Caseys General and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and CDN IMPERIAL.
Diversification Opportunities for Caseys General and CDN IMPERIAL
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caseys and CDN is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Caseys General i.e., Caseys General and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Caseys General and CDN IMPERIAL
Assuming the 90 days trading horizon Caseys General is expected to generate 1.18 times less return on investment than CDN IMPERIAL. In addition to that, Caseys General is 1.95 times more volatile than CDN IMPERIAL BANK. It trades about 0.11 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.25 per unit of volatility. If you would invest 4,390 in CDN IMPERIAL BANK on August 31, 2024 and sell it today you would earn a total of 1,729 from holding CDN IMPERIAL BANK or generate 39.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Caseys General Stores |
| CDN IMPERIAL BANK |
Caseys General and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and CDN IMPERIAL
The main advantage of trading using opposite Caseys General and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| Caseys General vs. Air New Zealand | Caseys General vs. WIZZ AIR HLDGUNSPADR4 | Caseys General vs. Fair Isaac Corp | Caseys General vs. Ryanair Holdings plc |
| CDN IMPERIAL vs. SIMS METAL MGT | CDN IMPERIAL vs. Sterling Construction | CDN IMPERIAL vs. Jacquet Metal Service | CDN IMPERIAL vs. Australian Agricultural |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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