Correlation Between Caseys General and MT Bank
Can any of the company-specific risk be diversified away by investing in both Caseys General and MT Bank 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 MT Bank 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 MT Bank Corp, you can compare the effects of market volatilities on Caseys General and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and MT Bank.
Diversification Opportunities for Caseys General and MT Bank
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caseys and MTZ is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Caseys General i.e., Caseys General and MT Bank go up and down completely randomly.
Pair Corralation between Caseys General and MT Bank
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.84 times more return on investment than MT Bank. However, Caseys General Stores is 1.19 times less risky than MT Bank. It trades about 0.08 of its potential returns per unit of risk. MT Bank Corp is currently generating about 0.06 per unit of risk. If you would invest 22,501 in Caseys General Stores on September 4, 2024 and sell it today you would earn a total of 17,099 from holding Caseys General Stores or generate 75.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. MT Bank Corp
Performance |
| Timeline |
| Caseys General Stores |
| MT Bank Corp |
Caseys General and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and MT Bank
The main advantage of trading using opposite Caseys General and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| MT Bank vs. BURLINGTON STORES | MT Bank vs. Caseys General Stores | MT Bank vs. AEON STORES | MT Bank vs. Neinor Homes SA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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