Correlation Between Caseys General and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both Caseys General and MIRAMAR HOTEL 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 MIRAMAR HOTEL 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 MIRAMAR HOTEL INV, you can compare the effects of market volatilities on Caseys General and MIRAMAR HOTEL 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 MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and MIRAMAR HOTEL.
Diversification Opportunities for Caseys General and MIRAMAR HOTEL
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and MIRAMAR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of Caseys General i.e., Caseys General and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between Caseys General and MIRAMAR HOTEL
Assuming the 90 days trading horizon Caseys General Stores is expected to under-perform the MIRAMAR HOTEL. In addition to that, Caseys General is 1.9 times more volatile than MIRAMAR HOTEL INV. It trades about -0.23 of its total potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about -0.12 per unit of volatility. If you would invest 109.00 in MIRAMAR HOTEL INV on December 6, 2024 and sell it today you would lose (3.00) from holding MIRAMAR HOTEL INV or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| Caseys General Stores |
| MIRAMAR HOTEL INV |
Caseys General and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and MIRAMAR HOTEL
The main advantage of trading using opposite Caseys General and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| Caseys General vs. MELIA HOTELS | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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