Correlation Between Caseys General and Polished

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

Diversification Opportunities for Caseys General and Polished

0.06

Correlation Coefficient

Caseys General  Polished

Significant diversification

The 3 months correlation between Caseys and Polished is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Polished in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polished 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 Polished. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polished has no effect on the direction of Caseys General i.e., Caseys General and Polished go up and down completely randomly.

Pair Corralation between Caseys General and Polished

If you would invest  37,623  in Caseys General Stores on September 29, 2024 and sell it today you would earn a total of  2,925  from holding Caseys General Stores or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Caseys General Stores  vs.  Polished

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 uncertain basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Polished

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polished has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Polished is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Caseys General and Polished

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

The idea behind Caseys General Stores and Polished 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.