Correlation Between Leslies and Caseys General

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

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

Diversification Opportunities for Leslies and Caseys General

0.18

Correlation Coefficient

Leslies  Caseys General

Average diversification

The 3 months correlation between Leslies and Caseys is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Leslies 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 Leslies 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 Leslies 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 Leslies i.e., Leslies and Caseys General go up and down completely randomly.

Pair Corralation between Leslies and Caseys General

Given the investment horizon of 90 days Leslies is expected to under-perform the Caseys General. In addition to that, Leslies is 3.46 times more volatile than Caseys General Stores. It trades about -0.02 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  36,185  in Caseys General Stores on August 30, 2024 and sell it today you would earn a total of  5,913  from holding Caseys General Stores or generate 16.34% return on investment over 90 days.

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

Leslies  vs.  Caseys General Stores

Leslies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Leslies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

Pair Trading with Leslies and Caseys General

The main advantage of trading using opposite Leslies and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leslies 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 Leslies 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 CEOs Directory module to screen CEOs from public companies around the world.