Correlation Between Caseys General and FAST RETAIL

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Caseys General and FAST RETAIL 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 FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on Caseys General and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and FAST RETAIL.

Diversification Opportunities for Caseys General and FAST RETAIL

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Caseys and FAST is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Caseys General i.e., Caseys General and FAST RETAIL go up and down completely randomly.

Pair Corralation between Caseys General and FAST RETAIL

Assuming the 90 days trading horizon Caseys General is expected to generate 1.07 times less return on investment than FAST RETAIL. But when comparing it to its historical volatility, Caseys General Stores is 1.14 times less risky than FAST RETAIL. It trades about 0.17 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,700  in FAST RETAIL ADR on September 9, 2024 and sell it today you would earn a total of  560.00  from holding FAST RETAIL ADR or generate 20.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Caseys General Stores  vs.  FAST RETAIL ADR

 Performance 
       Timeline  
Caseys General Stores 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.
FAST RETAIL ADR 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in FAST RETAIL ADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FAST RETAIL reported solid returns over the last few months and may actually be approaching a breakup point.

Caseys General and FAST RETAIL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Caseys General and FAST RETAIL

The main advantage of trading using opposite Caseys General and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.
The idea behind Caseys General Stores and FAST RETAIL ADR 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.
Check out your portfolio center.
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

Other Complementary Tools

Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio