Correlation Between Caseys General and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Caseys General and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Caseys General and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Fevertree Drinks.
Diversification Opportunities for Caseys General and Fevertree Drinks
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caseys and Fevertree is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Caseys General i.e., Caseys General and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Caseys General and Fevertree Drinks
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.79 times more return on investment than Fevertree Drinks. However, Caseys General Stores is 1.26 times less risky than Fevertree Drinks. It trades about 0.18 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about 0.06 per unit of risk. If you would invest 38,400 in Caseys General Stores on September 15, 2024 and sell it today you would earn a total of 2,000 from holding Caseys General Stores or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Caseys General Stores |
| Fevertree Drinks Plc |
Caseys General and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Fevertree Drinks
The main advantage of trading using opposite Caseys General and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Fevertree Drinks vs. Avanos Medical | Fevertree Drinks vs. Caseys General Stores | Fevertree Drinks vs. Ross Stores | Fevertree Drinks vs. Fast Retailing Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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