Correlation Between Caseys General and SIKA AG
Can any of the company-specific risk be diversified away by investing in both Caseys General and SIKA AG 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 SIKA AG 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 SIKA AG UNSPADR, you can compare the effects of market volatilities on Caseys General and SIKA AG 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 SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and SIKA AG.
Diversification Opportunities for Caseys General and SIKA AG
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and SIKA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR 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 SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of Caseys General i.e., Caseys General and SIKA AG go up and down completely randomly.
Pair Corralation between Caseys General and SIKA AG
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.96 times more return on investment than SIKA AG. However, Caseys General Stores is 1.04 times less risky than SIKA AG. It trades about 0.1 of its potential returns per unit of risk. SIKA AG UNSPADR is currently generating about 0.01 per unit of risk. If you would invest 25,250 in Caseys General Stores on October 28, 2024 and sell it today you would earn a total of 13,350 from holding Caseys General Stores or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. SIKA AG UNSPADR
Performance |
| Timeline |
| Caseys General Stores |
| SIKA AG UNSPADR |
Caseys General and SIKA AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and SIKA AG
The main advantage of trading using opposite Caseys General and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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