Correlation Between Caseys General and RWL SOLAR

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

Diversification Opportunities for Caseys General and RWL SOLAR

0.0

Correlation Coefficient

Caseys General  RWL SOLAR

Pay attention - limited upside

The 3 months correlation between Caseys and RWL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and RWL SOLAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWL SOLAR 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 RWL SOLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWL SOLAR has no effect on the direction of Caseys General i.e., Caseys General and RWL SOLAR go up and down completely randomly.

Pair Corralation between Caseys General and RWL SOLAR

If you would invest  33,554  in Caseys General Stores on September 28, 2024 and sell it today you would earn a total of  4,846  from holding Caseys General Stores or generate 14.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Caseys General Stores  vs.  RWL SOLAR

Caseys General Stores

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.

RWL SOLAR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RWL SOLAR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, RWL SOLAR is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Caseys General and RWL SOLAR

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

The idea behind Caseys General Stores and RWL SOLAR 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.