Correlation Between Caseys General and SPS Commerce
Can any of the company-specific risk be diversified away by investing in both Caseys General and SPS Commerce 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 SPS Commerce 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 SPS Commerce, you can compare the effects of market volatilities on Caseys General and SPS Commerce 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 SPS Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and SPS Commerce.
Diversification Opportunities for Caseys General and SPS Commerce
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caseys and SPS is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and SPS Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPS Commerce 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 SPS Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPS Commerce has no effect on the direction of Caseys General i.e., Caseys General and SPS Commerce go up and down completely randomly.
Pair Corralation between Caseys General and SPS Commerce
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.78 times more return on investment than SPS Commerce. However, Caseys General Stores is 1.28 times less risky than SPS Commerce. It trades about 0.12 of its potential returns per unit of risk. SPS Commerce is currently generating about 0.03 per unit of risk. If you would invest 24,653 in Caseys General Stores on September 14, 2024 and sell it today you would earn a total of 15,747 from holding Caseys General Stores or generate 63.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. SPS Commerce
Performance |
| Timeline |
| Caseys General Stores |
| SPS Commerce |
Caseys General and SPS Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and SPS Commerce
The main advantage of trading using opposite Caseys General and SPS Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, SPS Commerce 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 SPS Commerce will offset losses from the drop in SPS Commerce's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| SPS Commerce vs. PLAYTIKA HOLDING DL 01 | SPS Commerce vs. Caseys General Stores | SPS Commerce vs. National Retail Properties | SPS Commerce vs. PROSIEBENSAT1 MEDIADR4 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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