Correlation Between Franchise and Caseys General
Can any of the company-specific risk be diversified away by investing in both Franchise 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 Franchise and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franchise Group and Caseys General Stores, you can compare the effects of market volatilities on Franchise 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 Franchise with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franchise and Caseys General.
Diversification Opportunities for Franchise and Caseys General
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franchise and Caseys is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Franchise Group 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 Franchise 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 Franchise Group 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 Franchise i.e., Franchise and Caseys General go up and down completely randomly.
Pair Corralation between Franchise and Caseys General
If you would invest 37,255 in Caseys General Stores on September 18, 2024 and sell it today you would earn a total of 5,196 from holding Caseys General Stores or generate 13.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 1.59% |
Values | Daily Returns |
Franchise Group vs. Caseys General Stores
Performance |
Timeline |
Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caseys General Stores |
Franchise and Caseys General Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Franchise and Caseys General
The main advantage of trading using opposite Franchise and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franchise 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.Franchise vs. Mega Uranium | Franchise vs. Laramide Resources | Franchise vs. NXG NextGen Infrastructure | Franchise vs. Pinetree Capital |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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