Correlation Between Caseys General and Yamaha

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

Diversification Opportunities for Caseys General and Yamaha

-0.63

Correlation Coefficient

Caseys General  Yamaha

Excellent diversification

The 3 months correlation between Caseys and Yamaha is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Yamaha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha 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 Yamaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha has no effect on the direction of Caseys General i.e., Caseys General and Yamaha go up and down completely randomly.

Pair Corralation between Caseys General and Yamaha

Assuming the 90 days trading horizon Caseys General Stores is expected to under-perform the Yamaha. But the stock apears to be less risky and, when comparing its historical volatility, Caseys General Stores is 1.76 times less risky than Yamaha. The stock trades about -0.19 of its potential returns per unit of risk. The Yamaha is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  672.00  in Yamaha on October 23, 2024 and sell it today you would lose (16.00) from holding Yamaha or give up 2.38% of portfolio value over 90 days.

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

Caseys General Stores  vs.  Yamaha

Caseys General Stores

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 3 (%) 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.

Yamaha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yamaha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Caseys General and Yamaha

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

The idea behind Caseys General Stores and Yamaha 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.