Correlation Between Alphabet and Caseys General

Can any of the company-specific risk be diversified away by investing in both Alphabet and Caseys General 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 Alphabet and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alphabet Inc Class C and Caseys General Stores, you can compare the effects of market volatilities on Alphabet and Caseys General 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 Alphabet with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Caseys General.

Diversification Opportunities for Alphabet and Caseys General

0.18

Correlation Coefficient

Alphabet  Caseys General

Average diversification

The 3 months correlation between Alphabet and Caseys is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Alphabet i.e., Alphabet and Caseys General go up and down completely randomly.

Pair Corralation between Alphabet and Caseys General

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Caseys General. In addition to that, Alphabet is 1.01 times more volatile than Caseys General Stores. It trades about -0.12 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.08 per unit of volatility. If you would invest  39,823  in Caseys General Stores on December 29, 2024 and sell it today you would earn a total of  3,377  from holding Caseys General Stores or generate 8.48% return on investment over 90 days.

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

Alphabet Inc Class C  vs.  Caseys General Stores

Alphabet Class C

Risk-Adjusted Performance

Very Weak

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

Caseys General Stores

Risk-Adjusted Performance

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 fairly weak basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alphabet and Caseys General

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

The idea behind Alphabet Inc Class C and Caseys General Stores 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.