Correlation Between Caseys General and Maplebear Common

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

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

Diversification Opportunities for Caseys General and Maplebear Common

0.39

Correlation Coefficient

Caseys General  Maplebear Common

Weak diversification

The 3 months correlation between Caseys and Maplebear is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Maplebear Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maplebear Common Stock and Caseys General 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 Caseys General Stores are associated (or correlated) with Maplebear Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maplebear Common Stock has no effect on the direction of Caseys General i.e., Caseys General and Maplebear Common go up and down completely randomly.

Pair Corralation between Caseys General and Maplebear Common

Given the investment horizon of 90 days Caseys General Stores is expected to under-perform the Maplebear Common. But the stock apears to be less risky and, when comparing its historical volatility, Caseys General Stores is 2.07 times less risky than Maplebear Common. The stock trades about -0.01 of its potential returns per unit of risk. The Maplebear Common Stock is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,367  in Maplebear Common Stock on November 28, 2024 and sell it today you would lose (113.00) from holding Maplebear Common Stock or give up 2.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Caseys General Stores  vs.  Maplebear Common Stock

Caseys General Stores

Risk-Adjusted Performance

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 fairly strong basic indicators, Caseys General is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Maplebear Common Stock

Risk-Adjusted Performance

OK

Over the last 90 days Maplebear Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Maplebear Common 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 Caseys General and Maplebear Common

The main advantage of trading using opposite Caseys General and Maplebear Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Maplebear Common 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 Maplebear Common will offset losses from the drop in Maplebear Common's long position.

The idea behind Caseys General Stores and Maplebear Common Stock 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.