Correlation Between Caseys General and Power Assets
Can any of the company-specific risk be diversified away by investing in both Caseys General and Power Assets 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 Power Assets 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 Power Assets Holdings, you can compare the effects of market volatilities on Caseys General and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Power Assets.
Diversification Opportunities for Caseys General and Power Assets
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caseys and Power is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of Caseys General i.e., Caseys General and Power Assets go up and down completely randomly.
Pair Corralation between Caseys General and Power Assets
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 1.07 times more return on investment than Power Assets. However, Caseys General is 1.07 times more volatile than Power Assets Holdings. It trades about 0.2 of its potential returns per unit of risk. Power Assets Holdings is currently generating about -0.22 per unit of risk. If you would invest 38,400 in Caseys General Stores on November 3, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Power Assets Holdings
Performance |
| Timeline |
| Caseys General Stores |
| Power Assets Holdings |
Caseys General and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Power Assets
The main advantage of trading using opposite Caseys General and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| Caseys General vs. BRIT AMER TOBACCO | Caseys General vs. H2O Retailing | Caseys General vs. Tradegate AG Wertpapierhandelsbank | Caseys General vs. SALESFORCE INC CDR |
| Power Assets vs. BANKINTER ADR 2007 | Power Assets vs. BANK OF CHINA | Power Assets vs. CLOVER HEALTH INV | Power Assets vs. Acadia Healthcare |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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