Correlation Between Caseys General and J Sainsbury
Can any of the company-specific risk be diversified away by investing in both Caseys General and J Sainsbury 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 J Sainsbury 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 J Sainsbury plc, you can compare the effects of market volatilities on Caseys General and J Sainsbury 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 J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and J Sainsbury.
Diversification Opportunities for Caseys General and J Sainsbury
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caseys and JSNSF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and J Sainsbury plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Sainsbury plc 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 J Sainsbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Sainsbury plc has no effect on the direction of Caseys General i.e., Caseys General and J Sainsbury go up and down completely randomly.
Pair Corralation between Caseys General and J Sainsbury
Given the investment horizon of 90 days Caseys General Stores is expected to generate 0.73 times more return on investment than J Sainsbury. However, Caseys General Stores is 1.37 times less risky than J Sainsbury. It trades about 0.1 of its potential returns per unit of risk. J Sainsbury plc is currently generating about 0.0 per unit of risk. If you would invest 22,196 in Caseys General Stores on January 20, 2024 and sell it today you would earn a total of 8,744 from holding Caseys General Stores or generate 39.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Caseys General Stores vs. J Sainsbury plc
Performance |
| Timeline |
| Caseys General Stores |
| J Sainsbury plc |
Caseys General and J Sainsbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and J Sainsbury
The main advantage of trading using opposite Caseys General and J Sainsbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, J Sainsbury 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 J Sainsbury will offset losses from the drop in J Sainsbury's long position.| Caseys General vs. LesliesInc | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General vs. 1 800 FLOWERSCOM |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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