Correlation Between Caseys General and Information Services
Can any of the company-specific risk be diversified away by investing in both Caseys General and Information Services 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 Information Services 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 Information Services International Dentsu, you can compare the effects of market volatilities on Caseys General and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Information Services.
Diversification Opportunities for Caseys General and Information Services
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caseys and Information is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Information Services Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Caseys General i.e., Caseys General and Information Services go up and down completely randomly.
Pair Corralation between Caseys General and Information Services
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.81 times more return on investment than Information Services. However, Caseys General Stores is 1.24 times less risky than Information Services. It trades about 0.07 of its potential returns per unit of risk. Information Services International Dentsu is currently generating about 0.03 per unit of risk. If you would invest 22,896 in Caseys General Stores on September 3, 2024 and sell it today you would earn a total of 16,704 from holding Caseys General Stores or generate 72.96% 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. Information Services Internati
Performance |
| Timeline |
| Caseys General Stores |
| Information Services |
Caseys General and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Information Services
The main advantage of trading using opposite Caseys General and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' long position.| Caseys General vs. APPLIED MATERIALS | Caseys General vs. Rayonier Advanced Materials | Caseys General vs. GOODYEAR T RUBBER | Caseys General vs. TITANIUM TRANSPORTGROUP |
| Information Services vs. Mitsubishi Gas Chemical | Information Services vs. Tencent Music Entertainment | Information Services vs. EIDESVIK OFFSHORE NK | Information Services vs. BW OFFSHORE LTD |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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