Correlation Between Caseys General and Maplebear Common

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

Diversification Opportunities for Caseys General and Maplebear Common

0.71

Correlation Coefficient

Caseys General  Maplebear Common

Poor diversification

The 3 months correlation between Caseys and Maplebear is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Maplebear Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maplebear Common Stock 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 Maplebear Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maplebear Common Stock has no effect on the direction of Caseys General i.e., Caseys General and Maplebear Common go up and down completely randomly.

Pair Corralation between Caseys General and Maplebear Common

Given the investment horizon of 90 days Caseys General is expected to generate 1.33 times less return on investment than Maplebear Common. But when comparing it to its historical volatility, Caseys General Stores is 1.53 times less risky than Maplebear Common. It trades about 0.15 of its potential returns per unit of risk. Maplebear Common Stock is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,589  in Maplebear Common Stock on August 30, 2024 and sell it today you would earn a total of  755.00  from holding Maplebear Common Stock or generate 21.04% return on investment over 90 days.

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

Caseys General Stores  vs.  Maplebear Common Stock

Caseys General Stores

Risk-Adjusted Performance

11 of 100

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 fairly weak basic indicators, Caseys General showed solid returns over the last few months and may actually be approaching a breakup point.

Maplebear Common Stock

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maplebear Common Stock are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Maplebear Common unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caseys General and Maplebear Common

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

The idea behind Caseys General Stores and Maplebear Common Stock 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.