Correlation Between MASI AGRICOLA and Caseys General

Can any of the company-specific risk be diversified away by investing in both MASI AGRICOLA 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 MASI AGRICOLA and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MASI AGRICOLA SPA and Caseys General Stores, you can compare the effects of market volatilities on MASI AGRICOLA 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 MASI AGRICOLA with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of MASI AGRICOLA and Caseys General.

Diversification Opportunities for MASI AGRICOLA and Caseys General

0.38

Correlation Coefficient

MASI AGRICOLA  Caseys General

Weak diversification

The 3 months correlation between MASI and Caseys is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MASI AGRICOLA SPA 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 MASI AGRICOLA 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 MASI AGRICOLA SPA 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 MASI AGRICOLA i.e., MASI AGRICOLA and Caseys General go up and down completely randomly.

Pair Corralation between MASI AGRICOLA and Caseys General

Assuming the 90 days horizon MASI AGRICOLA SPA is expected to under-perform the Caseys General. But the stock apears to be less risky and, when comparing its historical volatility, MASI AGRICOLA SPA is 1.16 times less risky than Caseys General. The stock trades about -0.05 of its potential returns per unit of risk. The Caseys General Stores is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  38,552  in Caseys General Stores on December 26, 2024 and sell it today you would lose (1,152) from holding Caseys General Stores or give up 2.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

MASI AGRICOLA SPA  vs.  Caseys General Stores

MASI AGRICOLA SPA

Risk-Adjusted Performance

Very Weak

Over the last 90 days MASI AGRICOLA SPA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MASI AGRICOLA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Caseys General Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caseys General Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Caseys General is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MASI AGRICOLA and Caseys General

The main advantage of trading using opposite MASI AGRICOLA and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MASI AGRICOLA 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.

The idea behind MASI AGRICOLA SPA and Caseys General Stores pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.