Correlation Between Xiwang Special and Caseys General

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

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

Diversification Opportunities for Xiwang Special and Caseys General

0.0

Correlation Coefficient

Xiwang Special  Caseys General

Pay attention - limited upside

The 3 months correlation between Xiwang and Caseys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xiwang Special Steel 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 Xiwang Special 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 Xiwang Special Steel 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 Xiwang Special i.e., Xiwang Special and Caseys General go up and down completely randomly.

Pair Corralation between Xiwang Special and Caseys General

Assuming the 90 days horizon Xiwang Special Steel is expected to generate 61.06 times more return on investment than Caseys General. However, Xiwang Special is 61.06 times more volatile than Caseys General Stores. It trades about 0.09 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.08 per unit of risk. If you would invest  1.17  in Xiwang Special Steel on October 11, 2024 and sell it today you would lose (1.16) from holding Xiwang Special Steel or give up 99.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Xiwang Special Steel  vs.  Caseys General Stores

Xiwang Special Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiwang Special Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xiwang Special 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

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Xiwang Special and Caseys General

The main advantage of trading using opposite Xiwang Special and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiwang Special 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 Xiwang Special Steel 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.