Correlation Between Minerals Technologies and Caseys General

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

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

Diversification Opportunities for Minerals Technologies and Caseys General

0.62

Correlation Coefficient

Minerals Technologies  Caseys General

Poor diversification

The 3 months correlation between Minerals and Caseys is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies i.e., Minerals Technologies and Caseys General go up and down completely randomly.

Pair Corralation between Minerals Technologies and Caseys General

Assuming the 90 days horizon Minerals Technologies is expected to under-perform the Caseys General. But the stock apears to be less risky and, when comparing its historical volatility, Minerals Technologies is 1.25 times less risky than Caseys General. The stock trades about -0.19 of its potential returns per unit of risk. The Caseys General Stores is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  38,352  in Caseys General Stores on December 23, 2024 and sell it today you would lose (2,152) from holding Caseys General Stores or give up 5.61% of portfolio value over 90 days.

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

Minerals Technologies  vs.  Caseys General Stores

Minerals Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minerals Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady 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

Very Weak

Over the last 90 days Caseys General Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Caseys General is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Minerals Technologies and Caseys General

The main advantage of trading using opposite Minerals Technologies and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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 Minerals Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.