Correlation Between Caseys General and Apple

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

Diversification Opportunities for Caseys General and Apple

-0.1

Correlation Coefficient

Caseys General  Apple

Good diversification

The 3 months correlation between Caseys and Apple is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Caseys General i.e., Caseys General and Apple go up and down completely randomly.

Pair Corralation between Caseys General and Apple

Assuming the 90 days trading horizon Caseys General Stores is expected to generate 1.18 times more return on investment than Apple. However, Caseys General is 1.18 times more volatile than Apple Inc. It trades about 0.09 of its potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of risk. If you would invest  19,651  in Caseys General Stores on December 2, 2024 and sell it today you would earn a total of  19,349  from holding Caseys General Stores or generate 98.46% 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.  Apple Inc

Caseys General Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caseys General Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Caseys General is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Apple 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 Apple

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

The idea behind Caseys General Stores and Apple Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.