Correlation Between Caseys General and Silver Mines

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

Diversification Opportunities for Caseys General and Silver Mines

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Caseys and Silver is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines 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 Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Caseys General i.e., Caseys General and Silver Mines go up and down completely randomly.

Pair Corralation between Caseys General and Silver Mines

Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.22 times more return on investment than Silver Mines. However, Caseys General Stores is 4.48 times less risky than Silver Mines. It trades about 0.0 of its potential returns per unit of risk. Silver Mines Limited is currently generating about -0.1 per unit of risk. If you would invest  38,600  in Caseys General Stores on October 27, 2024 and sell it today you would earn a total of  0.00  from holding Caseys General Stores or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

Caseys General Stores  vs.  Silver Mines Limited

 Performance 
       Timeline  
Caseys General Stores 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Caseys General is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Silver Mines Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Silver Mines Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Caseys General and Silver Mines Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Caseys General and Silver Mines

The main advantage of trading using opposite Caseys General and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Silver Mines 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 Silver Mines will offset losses from the drop in Silver Mines' long position.
The idea behind Caseys General Stores and Silver Mines 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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