Correlation Between Caseys General and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Caseys General and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Caseys General and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and SENECA FOODS-A.
Diversification Opportunities for Caseys General and SENECA FOODS-A
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caseys and SENECA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Caseys General i.e., Caseys General and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Caseys General and SENECA FOODS-A
Assuming the 90 days trading horizon Caseys General is expected to generate 1.75 times less return on investment than SENECA FOODS-A. But when comparing it to its historical volatility, Caseys General Stores is 1.32 times less risky than SENECA FOODS-A. It trades about 0.21 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 5,500 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 950.00 from holding SENECA FOODS A or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. SENECA FOODS A
Performance |
| Timeline |
| Caseys General Stores |
| SENECA FOODS A |
Caseys General and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and SENECA FOODS-A
The main advantage of trading using opposite Caseys General and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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