Correlation Between Caseys General and Atea ASA
Can any of the company-specific risk be diversified away by investing in both Caseys General and Atea ASA 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 Atea ASA 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 Atea ASA, you can compare the effects of market volatilities on Caseys General and Atea ASA 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 Atea ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Atea ASA.
Diversification Opportunities for Caseys General and Atea ASA
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caseys and Atea is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Atea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atea ASA 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 Atea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atea ASA has no effect on the direction of Caseys General i.e., Caseys General and Atea ASA go up and down completely randomly.
Pair Corralation between Caseys General and Atea ASA
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 1.03 times more return on investment than Atea ASA. However, Caseys General is 1.03 times more volatile than Atea ASA. It trades about -0.02 of its potential returns per unit of risk. Atea ASA is currently generating about -0.02 per unit of risk. If you would invest 39,951 in Caseys General Stores on December 1, 2024 and sell it today you would lose (951.00) from holding Caseys General Stores or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Caseys General Stores vs. Atea ASA
Performance |
| Timeline |
| Caseys General Stores |
| Atea ASA |
Caseys General and Atea ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Atea ASA
The main advantage of trading using opposite Caseys General and Atea ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Atea ASA 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 Atea ASA will offset losses from the drop in Atea ASA's long position.| Caseys General vs. Chiba Bank | ||
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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