Correlation Between Caseys General and Ping An

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

Diversification Opportunities for Caseys General and Ping An

-0.24

Correlation Coefficient

Caseys General  Ping An

Very good diversification

The 3 months correlation between Caseys and Ping is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Ping An Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Healthcare 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Healthcare has no effect on the direction of Caseys General i.e., Caseys General and Ping An go up and down completely randomly.

Pair Corralation between Caseys General and Ping An

Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.34 times more return on investment than Ping An. However, Caseys General Stores is 2.94 times less risky than Ping An. It trades about 0.09 of its potential returns per unit of risk. Ping An Healthcare is currently generating about -0.04 per unit of risk. If you would invest  26,001  in Caseys General Stores on October 5, 2024 and sell it today you would earn a total of  12,599  from holding Caseys General Stores or generate 48.46% return on investment over 90 days.

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

Caseys General Stores  vs.  Ping An Healthcare

Caseys General Stores

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ping An Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ping An Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Caseys General and Ping An

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

The idea behind Caseys General Stores and Ping An Healthcare 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.