Correlation Between Caseys General and Karoon Energy
Can any of the company-specific risk be diversified away by investing in both Caseys General and Karoon Energy 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 Karoon Energy 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 Karoon Energy, you can compare the effects of market volatilities on Caseys General and Karoon Energy 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 Karoon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Karoon Energy.
Diversification Opportunities for Caseys General and Karoon Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caseys and Karoon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Karoon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karoon Energy 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 Karoon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karoon Energy has no effect on the direction of Caseys General i.e., Caseys General and Karoon Energy go up and down completely randomly.
Pair Corralation between Caseys General and Karoon Energy
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.79 times more return on investment than Karoon Energy. However, Caseys General Stores is 1.27 times less risky than Karoon Energy. It trades about 0.35 of its potential returns per unit of risk. Karoon Energy is currently generating about 0.03 per unit of risk. If you would invest 34,800 in Caseys General Stores on September 4, 2024 and sell it today you would earn a total of 5,200 from holding Caseys General Stores or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Karoon Energy
Performance |
| Timeline |
| Caseys General Stores |
| Karoon Energy |
Caseys General and Karoon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Karoon Energy
The main advantage of trading using opposite Caseys General and Karoon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Karoon Energy 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 Karoon Energy will offset losses from the drop in Karoon Energy's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Karoon Energy vs. GALENA MINING LTD | Karoon Energy vs. OFFICE DEPOT | Karoon Energy vs. PKSHA TECHNOLOGY INC | Karoon Energy vs. MTI WIRELESS EDGE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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