Correlation Between Caseys General and MOGU

Can any of the company-specific risk be diversified away by investing in both Caseys General and MOGU 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 MOGU 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 MOGU Inc, you can compare the effects of market volatilities on Caseys General and MOGU 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 MOGU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and MOGU.

Diversification Opportunities for Caseys General and MOGU

-0.25

Correlation Coefficient

Caseys General  MOGU

Very good diversification

The 3 months correlation between Caseys and MOGU is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU Inc 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 MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of Caseys General i.e., Caseys General and MOGU go up and down completely randomly.

Pair Corralation between Caseys General and MOGU

Given the investment horizon of 90 days Caseys General Stores is expected to under-perform the MOGU. But the stock apears to be less risky and, when comparing its historical volatility, Caseys General Stores is 4.33 times less risky than MOGU. The stock trades about -0.21 of its potential returns per unit of risk. The MOGU Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  220.00  in MOGU Inc on September 27, 2024 and sell it today you would lose (2.00) from holding MOGU Inc or give up 0.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Caseys General Stores  vs.  MOGU Inc

Caseys General Stores

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MOGU Inc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days MOGU Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Caseys General and MOGU

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

The idea behind Caseys General Stores and MOGU Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.