Correlation Between Ross Stores and Caseys General

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ross Stores 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 Ross Stores and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Caseys General Stores, you can compare the effects of market volatilities on Ross Stores 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 Ross Stores with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Caseys General.

Diversification Opportunities for Ross Stores and Caseys General

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Ross and Caseys is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores 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 Ross Stores 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 Ross Stores 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 Ross Stores i.e., Ross Stores and Caseys General go up and down completely randomly.

Pair Corralation between Ross Stores and Caseys General

Assuming the 90 days trading horizon Ross Stores is expected to generate 1.72 times less return on investment than Caseys General. In addition to that, Ross Stores is 1.02 times more volatile than Caseys General Stores. It trades about 0.08 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.15 per unit of volatility. If you would invest  33,753  in Caseys General Stores on September 6, 2024 and sell it today you would earn a total of  5,647  from holding Caseys General Stores or generate 16.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Ross Stores  vs.  Caseys General Stores

 Performance 
       Timeline  
Ross Stores 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Ross Stores may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Caseys General Stores 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ross Stores and Caseys General Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ross Stores and Caseys General

The main advantage of trading using opposite Ross Stores and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores 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 Ross Stores 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.
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Bonds Directory
Find actively traded corporate debentures issued by US companies
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing