Correlation Between Caseys General and GAMING FAC

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

Diversification Opportunities for Caseys General and GAMING FAC

-0.69

Correlation Coefficient

Caseys General  GAMING FAC

Excellent diversification

The 3 months correlation between Caseys and GAMING is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA 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 GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of Caseys General i.e., Caseys General and GAMING FAC go up and down completely randomly.

Pair Corralation between Caseys General and GAMING FAC

Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.47 times more return on investment than GAMING FAC. However, Caseys General Stores is 2.13 times less risky than GAMING FAC. It trades about 0.08 of its potential returns per unit of risk. GAMING FAC SA is currently generating about 0.03 per unit of risk. If you would invest  20,922  in Caseys General Stores on October 10, 2024 and sell it today you would earn a total of  16,878  from holding Caseys General Stores or generate 80.67% return on investment over 90 days.

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

Caseys General Stores  vs.  GAMING FAC SA

Caseys General Stores

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GAMING FAC SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMING FAC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Caseys General and GAMING FAC

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

The idea behind Caseys General Stores and GAMING FAC SA 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.