Correlation Between Caseys General and Publity AG

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

Diversification Opportunities for Caseys General and Publity AG

-0.26

Correlation Coefficient

Caseys General  Publity AG

Very good diversification

The 3 months correlation between Caseys and Publity is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Publity AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Publity AG 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 Publity AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Publity AG has no effect on the direction of Caseys General i.e., Caseys General and Publity AG go up and down completely randomly.

Pair Corralation between Caseys General and Publity AG

Assuming the 90 days trading horizon Caseys General is expected to generate 2.23 times less return on investment than Publity AG. But when comparing it to its historical volatility, Caseys General Stores is 8.83 times less risky than Publity AG. It trades about 0.08 of its potential returns per unit of risk. Publity AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Publity AG on October 25, 2024 and sell it today you would lose (19.00) from holding Publity AG or give up 31.67% of portfolio value over 90 days.

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

Caseys General Stores  vs.  Publity AG

Caseys General Stores

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 6 (%) 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.

Publity AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Publity AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Publity AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caseys General and Publity AG

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

The idea behind Caseys General Stores and Publity AG 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.