Correlation Between Caseys General and Container Store

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

Diversification Opportunities for Caseys General and Container Store

-0.67

Correlation Coefficient

Caseys General  Container Store

Excellent diversification

The 3 months correlation between Caseys and Container is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Container Store Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Container Store Group 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 Container Store. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Container Store Group has no effect on the direction of Caseys General i.e., Caseys General and Container Store go up and down completely randomly.

Pair Corralation between Caseys General and Container Store

Given the investment horizon of 90 days Caseys General Stores is expected to generate 0.11 times more return on investment than Container Store. However, Caseys General Stores is 9.27 times less risky than Container Store. It trades about 0.05 of its potential returns per unit of risk. Container Store Group is currently generating about 0.0 per unit of risk. If you would invest  37,294  in Caseys General Stores on September 30, 2024 and sell it today you would earn a total of  3,104  from holding Caseys General Stores or generate 8.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.68%
Values	Daily Returns

Caseys General Stores  vs.  Container Store Group

Caseys General Stores

Risk-Adjusted Performance

6 of 100

OK

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

Container Store Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Container Store Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Caseys General and Container Store

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

The idea behind Caseys General Stores and Container Store Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.