Correlation Between Safety Insurance and Caseys General
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and Caseys General Stores, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Caseys General.
Diversification Opportunities for Safety Insurance and Caseys General
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Safety and Caseys is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance 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 Safety Insurance 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 Safety Insurance 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 Safety Insurance i.e., Safety Insurance and Caseys General go up and down completely randomly.
Pair Corralation between Safety Insurance and Caseys General
Assuming the 90 days horizon Safety Insurance is expected to generate 2.19 times less return on investment than Caseys General. But when comparing it to its historical volatility, Safety Insurance Group is 1.09 times less risky than Caseys General. It trades about 0.05 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 25,449 in Caseys General Stores on September 14, 2024 and sell it today you would earn a total of 14,951 from holding Caseys General Stores or generate 58.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. Caseys General Stores
Performance |
| Timeline |
| Safety Insurance |
| Caseys General Stores |
Safety Insurance and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Caseys General
The main advantage of trading using opposite Safety Insurance and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. Insurance Australia Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. SIVERS SEMICONDUCTORS AB | Safety Insurance vs. CHINA HUARONG ENERHD 50 |
| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |