Correlation Between Caseys General and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Caseys General and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Caseys General and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Samsung Electronics.
Diversification Opportunities for Caseys General and Samsung Electronics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Caseys and Samsung is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Caseys General i.e., Caseys General and Samsung Electronics go up and down completely randomly.
Pair Corralation between Caseys General and Samsung Electronics
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.96 times more return on investment than Samsung Electronics. However, Caseys General Stores is 1.04 times less risky than Samsung Electronics. It trades about 0.1 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 19,947 in Caseys General Stores on November 9, 2024 and sell it today you would earn a total of 21,853 from holding Caseys General Stores or generate 109.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Samsung Electronics Co
Performance |
| Timeline |
| Caseys General Stores |
| Samsung Electronics |
Caseys General and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Samsung Electronics
The main advantage of trading using opposite Caseys General and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Caseys General vs. SWISS WATER DECAFFCOFFEE | Caseys General vs. HEALTHSTREAM | Caseys General vs. Coeur Mining | Caseys General vs. CARDINAL HEALTH |
| Samsung Electronics vs. SQUIRREL MEDIA SA | Samsung Electronics vs. ProSiebenSat1 Media SE | Samsung Electronics vs. Live Nation Entertainment | Samsung Electronics vs. Jacquet Metal Service |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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