Correlation Between Ceconomy and Caseys General
Can any of the company-specific risk be diversified away by investing in both Ceconomy 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 Ceconomy and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceconomy AG ADR and Caseys General Stores, you can compare the effects of market volatilities on Ceconomy 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 Ceconomy with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceconomy and Caseys General.
Diversification Opportunities for Ceconomy and Caseys General
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ceconomy and Caseys is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ceconomy AG ADR 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 Ceconomy 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 Ceconomy AG ADR 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 Ceconomy i.e., Ceconomy and Caseys General go up and down completely randomly.
Pair Corralation between Ceconomy and Caseys General
Assuming the 90 days horizon Ceconomy AG ADR is expected to generate 3.38 times more return on investment than Caseys General. However, Ceconomy is 3.38 times more volatile than Caseys General Stores. It trades about 0.36 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.35 per unit of risk. If you would invest 46.00 in Ceconomy AG ADR on November 18, 2024 and sell it today you would earn a total of 18.00 from holding Ceconomy AG ADR or generate 39.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceconomy AG ADR vs. Caseys General Stores
Performance |
| Timeline |
| Ceconomy AG ADR |
| Caseys General Stores |
Ceconomy and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceconomy and Caseys General
The main advantage of trading using opposite Ceconomy and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceconomy 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.| Ceconomy vs. Green River Gold | Ceconomy vs. Dixons Carphone plc | Ceconomy vs. Tandy Leather Factory | Ceconomy vs. Card Factory plc |
| Caseys General vs. Leslies | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General vs. 1 800 FLOWERSCOM |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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