Correlation Between Caseys General and Astral Foods

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

Diversification Opportunities for Caseys General and Astral Foods

0.35

Correlation Coefficient

Caseys General  Astral Foods

Weak diversification

The 3 months correlation between Caseys and Astral is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Caseys General i.e., Caseys General and Astral Foods go up and down completely randomly.

Pair Corralation between Caseys General and Astral Foods

Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.53 times more return on investment than Astral Foods. However, Caseys General Stores is 1.9 times less risky than Astral Foods. It trades about 0.09 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.02 per unit of risk. If you would invest  20,330  in Caseys General Stores on October 4, 2024 and sell it today you would earn a total of  18,070  from holding Caseys General Stores or generate 88.88% return on investment over 90 days.

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

Caseys General Stores  vs.  Astral Foods Limited

Caseys General Stores

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.

Astral Foods Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Astral Foods is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Caseys General and Astral Foods

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

The idea behind Caseys General Stores and Astral Foods Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..