Correlation Between FARM 51 and Caseys General
Can any of the company-specific risk be diversified away by investing in both FARM 51 and Caseys General 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 FARM 51 and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Caseys General Stores, you can compare the effects of market volatilities on FARM 51 and Caseys General 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 FARM 51 with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Caseys General.
Diversification Opportunities for FARM 51 and Caseys General
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between FARM and Caseys is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores and FARM 51 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 FARM 51 GROUP are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of FARM 51 i.e., FARM 51 and Caseys General go up and down completely randomly.
Pair Corralation between FARM 51 and Caseys General
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 2.61 times more return on investment than Caseys General. However, FARM 51 is 2.61 times more volatile than Caseys General Stores. It trades about 0.2 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.2 per unit of risk. If you would invest 297.00 in FARM 51 GROUP on November 3, 2024 and sell it today you would earn a total of 41.00 from holding FARM 51 GROUP or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Caseys General Stores
Performance |
| Timeline |
| FARM 51 GROUP |
| Caseys General Stores |
FARM 51 and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Caseys General
The main advantage of trading using opposite FARM 51 and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| FARM 51 vs. MOUNT GIBSON IRON | FARM 51 vs. 24SEVENOFFICE GROUP AB | FARM 51 vs. United States Steel | FARM 51 vs. BlueScope Steel Limited |
| Caseys General vs. BRIT AMER TOBACCO | Caseys General vs. H2O Retailing | Caseys General vs. Tradegate AG Wertpapierhandelsbank | Caseys General vs. SALESFORCE INC CDR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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