Correlation Between Vastned Retail and Caseys General

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

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

Diversification Opportunities for Vastned Retail and Caseys General

0.52

Correlation Coefficient

Vastned Retail  Caseys General

Very weak diversification

The 3 months correlation between Vastned and Caseys is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV 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 Vastned Retail 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 Vastned Retail NV 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 Vastned Retail i.e., Vastned Retail and Caseys General go up and down completely randomly.

Pair Corralation between Vastned Retail and Caseys General

Assuming the 90 days horizon Vastned Retail is expected to generate 1.76 times less return on investment than Caseys General. But when comparing it to its historical volatility, Vastned Retail NV is 1.09 times less risky than Caseys General. It trades about 0.22 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  34,800  in Caseys General Stores on September 4, 2024 and sell it today you would earn a total of  5,200  from holding Caseys General Stores or generate 14.94% return on investment over 90 days.

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

Vastned Retail NV  vs.  Caseys General Stores

Vastned Retail NV

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vastned Retail NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vastned Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Caseys General Stores

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 14 (%) 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.

Pair Trading with Vastned Retail and Caseys General

The main advantage of trading using opposite Vastned Retail and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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 Vastned Retail NV 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.