Correlation Between Caseys General and Pick N
Can any of the company-specific risk be diversified away by investing in both Caseys General and Pick N 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 Pick N 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 Pick n Pay, you can compare the effects of market volatilities on Caseys General and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Pick N.
Diversification Opportunities for Caseys General and Pick N
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caseys and Pick is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of Caseys General i.e., Caseys General and Pick N go up and down completely randomly.
Pair Corralation between Caseys General and Pick N
Assuming the 90 days trading horizon Caseys General is expected to generate 1.45 times less return on investment than Pick N. But when comparing it to its historical volatility, Caseys General Stores is 1.26 times less risky than Pick N. It trades about 0.16 of its potential returns per unit of risk. Pick n Pay is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 117.00 in Pick n Pay on September 2, 2024 and sell it today you would earn a total of 38.00 from holding Pick n Pay or generate 32.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Pick n Pay
Performance |
| Timeline |
| Caseys General Stores |
| Pick n Pay |
Caseys General and Pick N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Pick N
The main advantage of trading using opposite Caseys General and Pick N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Pick N 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 Pick N will offset losses from the drop in Pick N's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Pick N vs. Taiwan Semiconductor Manufacturing | Pick N vs. AUSTEVOLL SEAFOOD | Pick N vs. Tower Semiconductor | Pick N vs. CN MODERN DAIRY |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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